ACCC to Appeal Decision made in Favour of Australian Egg Corporation Ltd

The Australian Competition and Consumer Commission (ACCC) has filed a Notice of Appeal resulting from the Federal Court’s decision dismissing the ACCC’s proceedings against the Australian Egg Corporation Limited (AECL) and four other corporate and individual respondents. The ACCC alleged that the respondents attempted to induce egg producers to enter into an arrangement or understanding to restrict or limit the production or supply of eggs.

Background to the Case

In an article previously reported by TimeBase, the ACCC instituted proceedings in May 2014 and in February 2016, against the AECL for alleged cartel conduct (ACCC v Australian Egg Corporation Limited [2016] FCA 69 (10 February 2016)) but the Court found that while the ACCC had established that the respondents intended that egg producers should take action to address and correct an oversupply of eggs, it did not establish that this action was intended to be pursuant to an agreement or understanding involving reciprocal obligations by competing producers.

The ACCC Allegations

The ACCC had alleged that:

• AECL;
• Farm Pride Foods Ltd (Farm Pride); and
• Ironside Management Services Pty Ltd (t/a Twelve Oaks Poultry) (Twelve Oaks Poultry),

had attempted to induce egg producers who were members of AECL to cull hens or otherwise dispose of eggs, for the purpose of reducing the amount of eggs available for supply to consumers and businesses in Australia.

The Regulator had also alleged that Mr James Kellaway, the managing director of AECL, and Mr Jeffrey Ironside, a director of AECL and Twelve Oaks Poultry, had attempted to induce egg producers to engage in cartel conduct.

The Court dismissed the ACCC’s application, finding that while the ACCC had established that the respondents intended that egg producers should take action to address and correct an oversupply of eggs, it did not establish that this action was intended to be pursuant to an agreement or understanding involving mutual or reciprocal obligations by competing producers.

Role of the AECL

The AECL is an Industry Services Body (ISB) or provider of marketing and Research & Development (R&D) services for the benefit of all stakeholders, principally egg producers. AECL is mainly funded through statutory levies, collected under the Egg Industry Service Provision Act 2002 (Cth), and Australian Government funds for the purposes of approved R&D.

AECL services all known Australian egg producers irrespective of their size, location or farming system who distribute a wide variety of eggs and egg products to the local and international market. AECL is not an industry representative body.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

ACCC appeals AECL decision - ACCC Release MR 23/16

ACCC v Australian Egg Corporation Limited [2016] FCA 69 (10 February 2016)