Egg prices in Australia are under renewed scrutiny after regulators accused major suppliers of coordinating to weaken competition.
Here's what to know
According to PerthNow, the Australian Competition and Consumer Commission launched Federal Court action against Sunny Queen and 11 other shell-egg producers and suppliers over alleged anti-competitive conduct in the shell egg market.
In its filing, the Australian Competition and Consumer Commission alleges the companies exchanged information about planned egg production, used a common method for setting prices, and coordinated culls when they believed there was oversupply and wholesale prices were dropping.
The commission alleges the conduct goes back to at least October 2020. It also says Sunny Queen struck a January 2021 agreement with a rival concerning the supply of that rival's best produce.
That arrangement allegedly allowed the rival to supply up to 15,000 dozen free-range eggs each week to other buyers, while preventing sales to Sunny Queen's major supermarket customers — Coles, Woolworths, Aldi, Metcash, or Costco.
Framing the matter as a consumer issue, Australian Competition and Consumer Commission chair Gina Cass-Gottlieb said, "We are committed to protecting competition in fresh food supply chains so Australian consumers receive the benefits of businesses competing on price."
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More background
The watchdog's court filing says, "The relevant market or markets are highly concentrated, with few large suppliers of shell eggs and significant barriers to entry and expansion."
When a small number of major players dominate a market, consumers have fewer protections if those companies stop competing independently.
The Australian Competition and Consumer Commission alleges the arrangements "brought together substantial volumes of eggs that could otherwise have been supplied independently" and "substantially reduced the competitive rivalry that would otherwise have existed between the respondents."
The case centers on whether major companies may have interfered with the market pressures that typically help keep food prices in check.
Another Australian Competition and Consumer Commission claim concerns a Queensland poultry farm at Yarranlea, near Toowoomba. The commission says Sunny Queen's major suppliers — who were also shareholders in the company — arranged to buy it in 2021 to keep competitors from using it.
The legal document alleges the farm had not been "used productively."
What's being done?
"These proceedings are a reminder that businesses must make their production, supply, and pricing decisions independently," Cass-Gottlieb said, suggesting anti-competitive conduct can leave shoppers with higher checkout prices and fewer choices.
The court process will determine whether the accused conduct violated competition law.
In a statement, Sunny Queen said it rejected the allegations and planned to defend the case.
Where can I learn more?
Poultry industry practices, corporate conduct, and disputes over corporate environmental claims can affect supermarket prices and inflate grocery costs for customers.
• Scientists have said gene technology could prevent the culling of billions of male chicks in the egg industry.
• In U.K. supermarkets, millions of chickens showed hock burn, raising fresh animal-welfare concerns.
• Authorities in Albania said farmers sold pesticide-contaminated fruit at local markets despite safety risks.
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