ACCC cracks alleged egg cartel wide open

The Australian Competition and Consumer Commission has scrambled the plans of an alleged egg cartel, launching legal action yesterday against the Australian Egg Corporation Ltd (AECL) and several of its directors and associated companies.

The ACCC alleges the AECL, an industry body for egg farmers, attempted to persuade some of its members to enter into an arrangement to cull hens and dispose of eggs to reduce the amount of eggs available for supply.

It is claimed the AECL board encouraged its members to reduce egg production in its member publications from November 2010, in order to avoid oversupply which would affect egg prices.

The ACCC also alleges the board held an ‘Egg Oversupply Crisis Meeting’ in February 2012, which was attended by egg producers in Sydney, where it sought to coordinate a response by egg producers to reduce the supply of eggs.

However, the ACCC has not claimed the AECL was successful it its attempt to make a cartel arrangement with Australian egg producers.

In a statement, the AECL said it has fully co-operated with the ACCC in its investigations.

“AECL intends to co-operate fully in the court process but is not otherwise able to comment as the matter is now before the Federal Court.”

The AECL collects levies from its members for research and development activities, as well as promotional activities, and at the time of the alleged cartel conduct, it had between 100 and 150 egg producer members.

In 2012, the Australian egg industry consisted of 301 egg farms and produced 397 million dozen eggs with a gross value at market of $1.672 billion.