Case note: ACCC v Turi Foods

By Voiceless Legal Counsel Emmanuel Giuffre

Citation: Australian Competition and Consumer Commission v Turi Foods Pty Ltd (No 4) [2013] FCA 665

Court – Federal Court of Australia, General Division – Melbourne
Judge – Justice Richard Tracey
Date of Judgement – 8 July 2013

In a landmark decision, the Federal Court handed down its long awaited decision in proceedings brought by the Australian Competition and Consumer Commission (ACCC) against two of Australia’s largest poultry producers, Baiada Poultry Pty Ltd (Baiada) and Bartter Enterprises Pty Limited (Bartter), as well as the Australian Chicken and Meat Federation Inc. (the Association) (together, the Respondents).[1]

The Federal Court found in favour of the ACCC, claiming that the Respondents had engaged in misleading and deceptive conduct in accordance with the consumer protection legislation. The decision was the culmination of an 18 month legal battle brought by the ACCC and represents a win for the animal protection movement.

The ACCC’s claim

The ACCC claimed that the Respondents (which included the owners of Steggles and Lilydale Free Range Chickens), had misled the public by labelling chickens “free to roam” in advertising, packaging and publication materials. The ACCC claimed that the population density of meat chickens raised in barns by Baiada and Bartter did not allow for chickens to roam freely, and that the high number of young chickens in each shed meant that each chicken had a living area of equal to or less than an A4 sheet of paper.  The court was told chickens in Baiada and Bartter products were raised in seven sheds between 1000 square metres and 3000 square metres in size and at any one time these sheds held about 30,000 to 40,000 chickens.[2]

In labelling and advertising their products as “free to roam”, the ACCC claimed that Baiada and Bartter had:

  • engaged in misleading or deceptive conduct, or conduct which is likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act 1974 (Cth) (the TPA) (in respect of conduct up to 31 December 2010) and s 18 of the Australian Consumer Law (the ACL) (in respect of conduct on and after 1 January 2011);
  • made false representations in contravention of s 53(a) of the TPA and s 29(1)(a) of the ACL; and
  • engaged in conduct which is liable to mislead the public as to the nature and/or characteristics of the meat chickens raised on their behalf in contravention of s 55 of the TPA and s 33 of the ACL.

By making statements on their website that Baiada and Bartter’s product s were “free to roam”, the ACCC claimed that the Association:

  • was misleading and deceptive and likely to mislead and deceive in contravention of s 52 the TPA and s 18 of the ACL; 
  • falsely represented that chickens raised or grown in barns in Australia have had a particular history in contravention of s 53(a) of the TPA and s 29(1)(a) of the ACL; and
  • was liable to mislead the public as to the nature and characteristics of chickens raised or grown in barns in Australia in contravention of s 55 of the TPA and s 33 of the ACL.

The Respondents strongly denied the ACCC’s claims.

The decision

On 9 July 2013, Federal Court judge Richard Tracey found in favour of the ACCC and held that the Respondents had contravened ss 52 and 53(a) of the TPA.  Justice Tracey also found that the ACCC had not successfully made out its allegation of a contravention of s 55 of the TPA.

Justice Tracey considered the natural meaning of “free to roam” when applied to chickens and agreed with the ACCC’s assessment that it means the “largely uninhibited ability of the chickens to move around at will in an aimless manner”. Justice Tracey also considered that this phrase would be so understood by a significant number of hypothetical consumers to whom the labels, advertising or websites were directed.[3]

In arriving at his decision, Justice Tracey toured a number of chicken sheds during the trial and CCTVC footage, and found the amount of space for each chicken and their consequent ability to “roam freely” varied significantly at different stages of their life cycle.  Justice Tracey stated: “The impression of a continuous wall-to-wall sea of birds remained. With few exceptions, each bird was in physical contact with one or more other birds. They were, however, able to and did move as a group.”[4]

In his reasoning, Justice Tracey noted that until the number of chickens were reduced somewhere between the 33rd and 42nd days of the growth cycle, the chickens were not free to move around the sheds at will and with a sufficient degree of unimpeded movement to justify the assertion that they were “free to roam.”[5]

Justice Tracey will hear submissions about penalties at a later date.

Commentary

While it is arguable that Justice Tracey’s decision will have only a marginal impact on stemming intensive factory farming practices in the chicken meat industry, the decision sends a strong message to producers: you can no longer mask the truth behind your production methods. The decision is also a win for consumers, who will now have some clarity around the language commonly used on product labels.

This is the second such win by the ACCC.  In January, Turi Foods, parent company of a separate chicken brand La Ionica, paid a $100,000 fine after it admitted that describing its chickens as "free to roam" was misleading because they were raised in high-density barns.[6]

The Federal Court’s decision is a clear win for the animal protection movement and indicates how, even though legislative protections may be lacking, innovative legal strategies such as invoking those protections under the Australian Consumer Law can be successful in the fight against factory farming practices.

Importantly, cases like this indicate that many Australian consumers are moving towards more ethical and animal friendly products, and that some producers are desperately trying to capitalise on this sentiment – even if they are not prepared to reform their production methodologies in the process.

Of course, more needs to be done. Caged egg production systems and other cruel factory farming processes (such as de-beaking, de-toeing, wing clipping and forced moulting) must be prohibited.  We also need a robust, nationally consistent and legally enforceable truth in labelling regime that clearly defines commonly used terms, such as “free range”, “free to roam”, “barn laid”, “enriched cages” and “caged”. The Federal Court’s decision, however, is a step in the right direction.




[1] The first respondent, Turi Foods, which had also used the phrase “free to roam” on its packaging and publications, had earlier settled it dispute with the ACCC on terms which included the making of declarations and consent orders. See Australian Competition and Consumer Commission v Turi Foods Pty Ltd (No 2) [2012] FCA 19.

[2] [2013] FCA 665, [12].

[3] [2013] FCA 665, [100].

[4] [2013] FCA 665, [43].

[5] [2013] FCA 665, [110].

[6] See Australian Competition and Consumer Commission v Turi Foods Pty Ltd (No 2) [2012] FCA 19.