The Australian Competition and Consumer Commission (ACCC) has filed a notice of appeal following the federal court’s decision to dismiss proceedings against the Australian Egg Corporation Limited (AECL) and four other corporate and individual respondents.
The ACCC alleged the respondents attempted to induce egg producers to enter into an arrangement or understanding to restrict or limit the production or supply of eggs.
AECL is an industry corporation that collects levies for promotional activities and research and development activities from member egg producers. At the relevant time, AECL had between 100 and 150 egg producer members.
The ACCC had alleged that AECL, Farm Pride Foods Ltd (Farm Pride), and Ironside Management Services Pty Ltd (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 amount 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 Mr Jeffrey Ironside, a director of AECL and Twelve Oaks Poultry, had attempted to induce egg producers to engage in cartel conduct.
The court dismissed the ACCC’s application, finding 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.
ACCC chairman Rod Sims said 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,” Mr Sims said.