Australia egg sector faces ACCC cartel case over supply coordination

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Australia egg cartel case

Highlights

ACCC filed Federal Court proceedings alleging 12 Australian egg producers and suppliers coordinated production, distribution, and expansion to reduce competition for years.
ACCC claims Sunny Queen and others collaborated to block a rival’s property purchase and restricted Kinross Farm’s sales to major retailers like Woolworths, Coles, Aldi, Metcash, and Costco.
Sunny Queen, controlling about one-third of wholesale egg supply to major retailers, denies all allegations and maintains business as usual during legal proceedings.

Federal Court case targets supply and expansion decisions

As reported by ABC News, the Australian Competition and Consumer Commission has filed civil proceedings in the Federal Court alleging widespread anti-competitive conduct across the egg industry. The regulator says 12 producers and suppliers coordinated on production volumes, distribution, expansion plans and culling to manage perceived oversupply, conduct it alleges substantially reduced competition for many years.

The ACCC also alleges Sunny Queen, Doug Hall Poultry Pty Ltd and Alpair Pty Ltd, trading as McLean Farms, coordinated to buy a property in Pittsworth, Queensland, to stop a rival supplier from acquiring it. ACCC chair Gina Cass-Gottlieb says the regulator also alleges that move had the effect of substantially lessening competition.

The proceedings mark the first case the ACCC has brought involving concerted practice allegations since that prohibition was introduced in 2017. The regulator says a concerted practice can involve competitors coordinating behaviour in ways that harm competition even without a formal agreement.

Consumer pricing and industry operations in focus

Gina Cass-Gottlieb says eggs are an important household staple and that weakened competition can leave consumers with less choice and less competitive prices. The regulator also alleges Sunny Queen restricted how many eggs rival Kinross could sell to customers and prevented Kinross from selling eggs to major retailers including Woolworths, Coles, Aldi, Metcash and Costco.

Sunny Queen, which holds about one-third of the wholesale egg supply market to major retailers in Australia, denies all allegations and says it intends to defend the proceedings. The company says the matter relates to terms in agreements with its shareholders and main egg suppliers in Queensland and Victoria, and that operations remain business as usual while the case is before the courts.

The legal action follows another ACCC court case launched more than a year ago against several large vegetable producers over alleged cartel conduct in supplies to Aldi. In the egg matter, the proceedings also involve entities including Ellerslie Free Range Farms Pty Ltd, Kinross Farm Pty Ltd and seven other companies.

In our earlier article on Australia’s food waste problem, we examined how an estimated 7.6 million tonnes of food is discarded each year, weighing on business margins and adding a multi-billion-dollar drag to the economy. We also noted that many businesses under-measure what they throw away, while tightening landfill capacity and the 2030 waste-reduction target are pushing more investment and policy focus toward organics recycling and better waste tracking.

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