Thousands of dozens of "free range" eggs weren't
Issued 14 March 2001/25
Thousands of dozens of "free range" eggs were from battery hens: Weedons Poultry Farm fined $35,000
Misleading claims that eggs were "free range", when they really came from battery hens kept in cages, cost Weedons Poultry Farm a $35,000 fine in the Christchurch District Court today.
Over 22,000 dozen "free range" eggs were sold through Christchurch supermarkets under the "Bowenvale Valley" brand during a 12 month period. The vast majority of these, in fact, had come from battery hens.
The Commerce Commission prosecuted Weedons Poultry for breaching the Fair Trading Act, which prohibits misleading conduct in relation to goods.
Commission Chair John Belgrave said that consumers must be able to rely on claims made about food because they cannot test the claims themselves.
"Growing numbers of consumers are prepared to pay considerably more for free range eggs because of views about the quality of the eggs and animal welfare," Mr Belgrave said. "Consumers paid more but did not get what they paid for."
Weedons Poultry doubled the price of its eggs when it marketed them to supermarkets as "free range". Supermarkets paid $3.50 a dozen, rather than $1.75, when told that Bowenvale Valley were free range eggs.
Analysis of the company's invoices showed that the additional profit made by the company from its deception was approximately $32,400.
During an interview with Commission staff, the company admitted that it had labelled eggs from battery hens as "free range". The company also produced a letter from its solicitor acknowledging that it had been at fault in marketing Bowenvale Valley eggs as "free range".
In explaining its marketing, the company stated that it had extreme difficulty trading against other competitors who had lowered their prices. It found that there was a demand for "free range" eggs and took advantage of that demand.
"This was a totally unacceptable response to competition," Mr Belgrave said. "It is an example of how misleading claims lead to consumers paying more and competitors being disadvantaged. Consumers who bought Bowenvale Valley eggs in the mistaken belief that they were free range, could instead have bought other brands."
In passing sentence, Judge Kean said that this was a deliberate and a clear cut case of deception, in trade, designed to con people into buying the product and it proved very successful. It was, he said, a fraud on the public. In addition Judge Kean said that the scam could easily have gone on longer if it had not been detected. The public would have had no way of telling which were genuine free range eggs and which were not. Consequently the sentence had to involve a deterrent aspect.