ACCC sues 12 major Australian egg producers including Sunny Queen over alleged cartel conduct
Some of Australia’s biggest egg producers have been accused of secretly coordinating supply decisions in a move the consumer watchdog says may have hurt competition for years.
Some of Australia’s biggest egg suppliers are facing legal action over allegations that they worked together to control egg supplies in Australia, potentially leaving shoppers with fewer choices and higher prices.
The Australian Competition and Consumer Commission (ACCC) has launched Federal Court proceedings against 12 egg producers and suppliers, including major industry players Sunny Queen, McLean Farms and Doug Hall Poultry.
The consumer watchdog alleges the businesses engaged in cartel and anti-competitive conduct dating back to at least October 2020.
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The watchdog claims the arrangements were designed to manage egg supplies and were likely to have substantially reduced competition over several years.
ACCC chair Gina Cass-Gottlieb said the allegations were extremely serious, particularly given eggs are a staple in Australian households.
“Our investigation has uncovered alleged widespread anti-competitive conduct in the egg industry that we allege has impacted the supply of eggs to Australian consumers since at least 2020,” Ms Cass-Gottlieb said.
“This alleged conduct is extremely serious, which is why we have commenced this Federal Court action.
“These companies are alleged to have coordinated in a range of decisions about their business operations, including the retailers each business could supply, what volumes they could produce and when to cull birds to manage periods of perceived over-supply.
“We allege this coordination between Sunny Queen, Hall and McLean Farms extended to purchasing a property in Pittsworth, Queensland, for the purpose of preventing its acquisition by rival egg suppliers. We also allege this had the effect of substantially lessening competition.
“We also allege that Sunny Queen restricted how many eggs its rival Kinross could sell to customers, and prevented Kinross from selling its eggs to Coles, Woolworths, Aldi, Metcash or Costco.”
Ms Cass-Gottlieb warned that when businesses worked together instead of competing, Australian consumers could ultimately pay the price.
“Fair competition in the supply of fresh food such as eggs is extremely important,” she said.
“Anti-competitive conduct disadvantages Australian consumers, who can face reduced choice and higher prices, as well as those businesses seeking to compete fairly or who are seeking to enter markets to provide competing supply.”
The ACCC has previously warned that cartels can drive up prices by allowing competing businesses to coordinate their activities rather than make independent commercial decisions.
The allegations have not been proven in court.
The Federal Court will now consider the watchdog’s claims.
