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ACCC launches court action against Sunny Queen and 11 other egg suppliers over alleged cartel conduct

Watchdog alleges Australia's largest egg producer coordinated production, distribution and culling with competitors to manipulate supply since at least 2020

By LineZotpaper
Published
Updated
Read Time2 min
Sources4 outlets
The Australian Competition and Consumer Commission (ACCC) has launched Federal Court action against Sunny Queen, the country's largest egg supplier, and 11 other producers, alleging they engaged in cartel conduct for at least six years by coordinating production volumes, distribution, expansion plans and culling to manage perceived oversupply, in a way that likely substantially reduced competition and may have driven up consumer prices.

The ACCC filed proceedings in the Federal Court on Tuesday against Sunny Queen, which supplies about a third of all eggs to retailers, along with its joint owners Doug Hall Poultry and McLean Farms, as well as a raft of related entities including Alpair, Ellerslie, Abbeyliz, Yallamundi and independent Victorian producer Kinross.

Each of the 12 entities is alleged to have engaged in cartel conduct and a "concerted practice" with the purpose, effect or likely effect of substantially reducing competition. The case is the first the ACCC has brought under concerted practice prohibitions since they were introduced in 2017.

"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."

The watchdog alleges that since at least October 2020, the suppliers coordinated on a range of business decisions including production volumes, distribution, expansion plans and culling to manage oversupply. Sunny Queen has warehouses in all mainland states.

Further details are expected to emerge as the case proceeds through the court.

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Analysis

Why This Matters

  • Consumers may have been paying higher prices for eggs due to alleged collusion, affecting household budgets during a cost-of-living squeeze.
  • The case tests the ACCC's powers under relatively new concerted practice laws, which could set a precedent for future competition enforcement.
  • If proven, the conduct could have distorted the national egg market for years, impacting retailers, smaller producers and ultimately shoppers.

Background

Egg production in Australia is concentrated among a handful of large suppliers. Sunny Queen is the dominant player, supplying roughly a third of the retail market. The ACCC has been increasingly active in pursuing alleged cartel behaviour in agricultural and grocery sectors. The concerted practice prohibition, introduced in 2017, targets coordination that falls short of formal agreement but still reduces competition. This is the first time the regulator has used that power in court.

Key Perspectives

ACCC: The watchdog argues the alleged coordination was widespread and serious, warranting Federal Court action to enforce competition law and protect consumers. Sunny Queen and other defendants: No public response has been reported at this stage. The companies face potential penalties and reputational damage if the allegations are proven. Consumer advocates: Likely to support the action as a necessary step to ensure fair pricing, particularly as grocery prices remain a sensitive political issue.

What to Watch

  • Whether the defendants contest the allegations or seek a settlement.
  • Any further ACCC actions in the grocery or agricultural sectors as part of its ongoing enforcement priorities.
  • Potential impact on egg prices if the alleged collusion is confirmed and remedies are imposed.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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