Australia’s largest egg supplier has been accused of allegedly conspiring to manipulate the market. In a Federal Court lawsuit, the company is accused of colluding with competitors to control egg supply and market sales.
The Australian Competition and Consumer Commission (ACCC) has taken Sunny Queen and another 11 egg producers and suppliers to court, alleging anti-competitive conduct dating back at least to 2020 10.
The regulator alleges that the companies coordinated egg production, distribution, expansion plans, and the timing of hen culls during periods of oversupply, thereby weakening market competition.
This lawsuit comes after years of steep increases in egg prices.
During the avian flu crisis in 2024, egg prices at one point soared by 47%, while the price of free-range eggs doubled, reaching 8 to 10 Australian dollars per carton.
ACCC Chair Gina Cass-Gottlieb said: “Our investigation found alleged widespread anti-competitive conduct in the egg industry. We allege that this conduct has affected the supply of eggs to Australian consumers since at least 2020.”
“These alleged actions are extremely serious, so we have decided to file a lawsuit in federal court.”
The companies alleged to be involved include Sunny Queen, Doug Hall Poultry, McLean Farms, Ellerslie Free Range Farms, and Kinross Farm.
Each company is accused of allegedly conspiring to manipulate the market and engaging in concerted practices whose purpose, actual effect, or likely effect was to substantially lessen market competition.
Concerted practices refer to companies secretly cooperating with one another rather than competing fairly on price or service.
This is the first case involving allegations of collusive conduct brought by the ACCC since the relevant ban was introduced in 2017.
Cass-Gottlieb said: “The companies allegedly coordinated a range of business decisions, including which retailers each could supply, how many eggs they could produce, and when to cull laying hens, in response to periods they considered to be ones of oversupply.”
The ACCC also alleges that Sunny Queen, Hall and McLean Farms coordinated the acquisition of a property in Pittsworth, Queensland, with the aim of preventing a competitor from doing the same.
Sunny Queen was also accused of restricting the number of eggs its competitor Kinross could sell and preventing the Victorian producer from supplying some of Australia’s largest retailers.
Cass-Gottlieb said: “We also allege that Sunny Queen restricted the number of eggs that its competitor Kinross could sell to customers and prevented Kinross from selling eggs to Coles, Woolworths, Aldi, Metcash or Costco.”
According to ACCC data, Sunny Queen is Australia’s largest egg supplier, accounting for approximately one-third of the country’s retail egg supply market.
The competition regulator said that the egg industry is highly concentrated, with a limited number of suppliers, and that significant barriers make it difficult for new producers to enter the market and for existing producers to expand.
Australians consume more than 250 eggs per person per year on average, making eggs one of the important items in everyday grocery shopping.
In relation to this case, the ACCC is seeking declarations, the imposition of penalties, injunctions, an order requiring the defendant to pay the legal costs, and other orders from the court.
A spokesperson for Sunny Queen told nine.com.au that the company denied the allegations made against it.
The speaker said: “These allegations mainly concern the terms of agreements between Sunny Queen and its shareholders, and major egg suppliers in Queensland and Victoria.”
“During the ACCC investigation, Sunny Queen provided full cooperation throughout. Sunny Queen denies these allegations and intends to defend itself in the proceedings.
“Sunny Queen was founded by Australian farmers and has been supplying eggs to Australian families for 50 years.
“Over the past 50 years, Sunny Queen has earned a strong reputation for its ethical farming methods and consumer service practices, and will continue to commit to upholding these high standards.
“During this legal process, Sunny Queen’s business will continue as usual, and we will continue supplying fresh, nutritious eggs to Australian families.”