Free-range claims under ACCC scrutiny

JOHN ROLFE
February 21, 2013
News Limited Network

THE ACCC will today declare open season on “free range” and other claims made by premium food makers.

In a major speech in Sydney, Australian Competition and Consumer Commission chairman Rod Sims will announce the ACCC’s seven priority areas for 2013.

Many are the same as last year, but Mr Sims will say that “new to our priorities is an interest in credence claims, particularly those in the food industry”.

Notes for his speech to the Committee for Economic Development of Australia say: “Consumers are increasingly placing weight on premium claims made by producers that a consumer cannot test or validate.

“They are in the hands of the producer, leading to a particular vulnerability.”

Mr Sims will highlight the ACCC’s ongoing concerns about “free range” eggs, country of origin claims and the labelling of olive oil.

In November, the ACCC said it planned to reject a trademark certifcation application by the Australian Egg Corporation because the proposed rules would have allowed eggs to be called “free range” even though chicken densities would be “very significantly higher than those in existing standards” and that beak trimming would have been “routinely practised”.

The ACCC’s other priority areas are:
ONLINE consumer issues, particularly fake testimonials and problems with group-buying sites;
DODGY tactics by door-to-door sellers representing energy retailers;
FALSE claims by telecommunications and IT companies;
FURTHER building awareness of consumer guarantees such as statutory warranties;
PROTECTING vulnerable indigenous consumers;
UNFAIR contract terms, with a special focus on telcos, airlines, hire-car companies and online traders; as well as
UNJUSTIFIABLE price hikes blamed on the carbon tax.

Last night, Mr Sims told News Limited that success in each of these areas would be one of the two yardsticks by which the ACCC should be measured in 2013.
The other mark would be whether the ACCC doubled to six the number of major legal actions for alleged misuse of market power, cartel behaviour or anti-competitive agreements.

The two most high-profile of 20-30 investigations the ACCC currently has open both concern the big supermarket chains. One relates to alleged misuse of market power to the detriment of suppliers and the other is probing the competitive impact of expanded shopper docket petrol discount schemes.