Australian egg board accused of creating cartel

An Australian levyboard for eggs has been accused of conspiring to create a “cartel arrangement”, by suggesting members cut hen numbers to prevent oversupply.

The Australian Competition and Consumer Commission (ACCC) has begun proceedings in the country’s Federal Court against the Australian Egg Corporation Limited (AECL), three of its directors and two egg companies. It alleges that the group attempted to induce members to cull hens or dispose of eggs to tighten the market.

The ACCC says the practice began in November 2010, first in member publications and later in an “egg oversupply crisis meeting” in which representatives of AECL sought a “co-ordinated approach” from members to reduce the supply of egg.

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“Detecting, stopping and deterring cartels operating in Australian markets remain an enduring priority for the ACCC, because of the ultimate impact of such anti-competitive conduct on Australian consumers who will pay more than they should for goods,” said ACCC chairman Rod Sims.

“Industry associations need to be conscious of competition compliance issues when they bring competing firms together. Today’s action sends a clear message that attempts by industry associations to co-ordinate anti-competitive behaviour by competitors will not be tolerated.”

The ACCC is seeking fines and costs, and that directors involved attend compliance training. It also wants the egg board and companies to establish and maintain a compliance programme.

Retail egg sales were valued at AUS$556m (£309m) in 2012, according to the ACCC.