The Australian Competition and Consumer Commission (ACCC) has launched legal action against major egg supplier Sunny Queen and 11 other producers/suppliers over alleged cartel and anti-competitive conduct.
The ACCC alleges the businesses coordinated decisions about how many eggs to produce, which retailers they could supply and when to cull birds to manage oversupply, reducing competition in the industry.
Here’s what happened.
Cartel
In Australia, it’s illegal for businesses to form a cartel instead of competing.
A cartel is when businesses agree to:
- Fix prices
- Divide markets or customers
- Limit the supply of goods or services
- Rig tenders by agreeing on who wins and at what price
The ACCC investigates suspected cartel activity and can take legal action against businesses.
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Allegations
On Tuesday, the ACCC filed civil proceedings in the Federal Court against Sunny Queen and 11 other Australian egg producers and suppliers.
The consumer watchdog alleges the businesses engaged in anti-competitive conduct from at least October 2020.
ACCC Chair Gina Cass-Gottlieb alleges they “coordinated in a range of decisions... including the retailers each business could supply, what volumes they could produce and when to cull birds to manage periods of perceived over-supply.”
The ACCC alleges three of the businesses coordinated to buy a property to stop a rival egg supplier from purchasing it, substantially reducing competition.
It also alleges Sunny Queen restricted the number of eggs rival supplier Kinross could sell and which businesses it could supply.
The maximum penalty for cartel or anti-competitive conduct can range from $10 million to more than $100 million per offence, depending on the applicable law and when the conduct occurred.
Response
A Sunny Queen spokesman told TDA the company “denies the allegations and intends to defend the proceedings”.
He said Sunny Queen had “cooperated fully with the ACCC throughout the course of its investigation”.
“Sunny Queen has earned a reputation for ethical farming and consumer practices and remains committed to adhering to these high standards,” he said.
