Sunny Queen is Australia’s largest egg producer, and is one of 12 companies facing allegations filed by the ACCC. File photo: Sunny Queen

THE Australian Competition and Consumer Commission yesterday filed civil proceedings in the Federal Court against 12 egg producers and suppliers, alleging they have breached competition laws by coordinating on production and supply of eggs in Australia.

ACCC alleges that since at least October 2020, key egg suppliers and producers coordinated on a range of business decisions including production volumes, distribution, expansion plans and culling to manage perceived oversupply, in a way that likely substantially reduced competition for many years.

The case includes concerted practice allegations, which involves co-operation between businesses that goes beyond them acting independently in response to market conditions, and is the first brought by the ACCC to include concerted practice allegations since the prohibition was introduced in 2017.

The proceedings involve allegations against entities including Sunny Queen, Doug Hall Poultry, Alpair Pty Ltd trading as McLean Farms, and Ellerslie Free Range Farms, all based in south-east Queensland, and Kinross Farm in Victoria.

Each of these entities is alleged to have engaged in cartel conduct, and to have engaged in a concerted practice with the purpose, effect or likely effect of substantially reducing competition.

A full list of company names for the 12 entities the subject of the proceedings is available in the ACCC’s concise statement.

“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,” ACCC chair Gina Cass-Gottlieb said.

“This alleged conduct is extremely serious, which is why we have commenced this Federal Court action.

“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.”

The ACCC alleges that the egg industry is highly concentrated, with a small number of large suppliers and significant barriers to entry and expansion.

Australians consuming on an average more than 250 eggs per person per year, and the ACCC allegations relate to the production and supply of free-range, cage and organic eggs.

“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 over-supply.”

“We allege this coordination between Sunny Queen, Hall and McLean Farms extended to purchasing a property in Pittsworth, Queensland, for the purpose of preventing its acquisition by rival egg suppliers.

“We also allege this had the effect of substantially lessening competition.”

“We also allege that Sunny Queen restricted how many eggs its rival Kinross could sell to customers, and prevented Kinross from selling its eggs to Coles, Woolworths, Aldi, Metcash or Costco.”

“We are committed to protecting competition in fresh food supply chains so Australian consumers receive the benefits of businesses competing on price.

“These proceedings are a reminder that businesses must make their production, supply and pricing decisions independently.”

The ACCC is seeking declarations, penalties, injunctions, costs and other orders.

Background on companies

Sunny Queen holds approximately one third of the market for the supply of eggs to retailers nationally, and acquires, markets and distributes eggs throughout Australia.

Sunny Queen is currently jointly owned by Ellerslie and McLean Farms, and has warehouse and distribution facilities in Qld, New South Wales, Victoria, South Australia, and Western Australia.

Canadian pension fund PSP Investments in 2024 bought a majority stake in Ellerslie.

During the relevant period, Hall, and companies sharing common ownership with that company, was a large egg producer headquartered in Ql.

DHP Consolidated was the parent company of several companies that produced eggs, which included Ellerslie.

In 2024, following a restructuring, Ellerslie became the holding company for the production subsidiaries.

Hall held 50 percent of the shares in Sunny Queen, which were subsequently acquired by Ellerslie.

These entities operate farms in Queensland including in Yandilla, Turralin and Punchs Creek.

McLean Farms is a large egg producer headquartered in Queensland.

McLean Farms operates farms in Qld and Victoria including at Pittsworth, Felton and Pinerow.

Kinross operates farms in locations including Euroa and Carisbrook, Vic.

Source: ACCC