ACCC challenges egg cartel ruling

The Australian Competition and Consumer Commission (ACCC) is appealing a decision by the Federal Court on 10 February 2016, which dismissed the ACCC’s proceedings against the Australian Egg Corporation Limited (AECL) and four other corporate and individual respondents alleging attempts to induce egg producers to enter into an arrangement or understanding to restrict or limit the production or supply of eggs.

The ACCC had alleged that AECL, Farm Pride Foods Ltd (Farm Pride) and Ironside Management Services (trading as 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 number of eggs available for supply to consumers and businesses in Australia.

The ACCC had also alleged that James Kellaway, the managing director of AECL, and Jeffrey Ironside, a director of AECL and Twelve Oaks Poultry, had attempted to induce egg producers to engage in cartel conduct. AECL is an industry corporation that collects levies from its members for promotional activities and research and development activities.

In dismissing the ACCC’s application, 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 mutual or reciprocal obligations by competing producers.

“Detecting and deterring cartel conduct continues to be a major focus for the ACCC. It is important that we seek clarity from the Full Court on issues of what will and will not constitute attempted cartel conduct, particularly in the context of conduct by a trade association interacting with its members,” said ACCC Chairman Rod Sims.

Originally published here.