Australia’s egg supplier Sunny Queen and 11 other companies are alleged to have breached competition laws by coordinating egg production and supply, according to civil proceedings filed by the Australian Competition and Consumer Commission (ACCC) in the Federal Court.
“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. This alleged conduct is extremely serious, which is why we have commenced this Federal Court action,” ACCC chair Gina Cass-Gottlieb said.
The watchdog alleges that key egg suppliers and producers coordinated a range of business decisions, including production volumes, distribution, expansion plans and the culling of birds to manage perceived oversupply. According to the ACCC, this conduct likely substantially reduced competition for many years.
The case includes allegations of concerted practices. This is the first case brought by the ACCC to include such allegations since the prohibition was introduced in 2017. A concerted practice involves cooperation between businesses that goes beyond acting independently in response to market conditions, the watchdog explains.
Each of the companies is alleged to have engaged in cartel conduct and a concerted practice with the purpose, effect or likely effect of substantially reducing competition. The alleged conduct relates to the production and supply of eggs, including free-range, cage and organic eggs.
Impact on consumers and competition
“Fair competition in the supply of fresh food such as eggs is extremely important. 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,” Cass-Gottlieb said.
The ACCC alleges that the Australian egg industry is highly concentrated, with a small number of large suppliers and significant barriers to entry and expansion. Eggs are an important consumer staple, with Australians consuming an annual average of more than 250 eggs per person.
“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 oversupply,” Cass-Gottlieb said.
“We’re committed to protecting competition in fresh food supply chains so Australian consumers receive the benefits of businesses competing on price.”
Sunny Queen holds a large market share
Sunny Queen is the largest egg supplier in Australia, holding approximately one-third of the national market for egg supplies to retailers. The company acquires, markets and distributes eggs throughout Australia.
Sunny Queen is jointly owned by Ellerslie and McLean Farms, which are among the other companies involved in the case.
