Misleading the ethical consumer: the regulation of free-range egg labelling.

• Jurisdiction: Australia
• Date: 01 April 2016
• Author: Parker, Christine

In mid-2014, Australian consumer affairs ministers announced that they would together set 'a national, legally enforceable definition of free-range eggs'. A response to significant conflict, claims and counterclaims about what free-range should mean, the proposed code could take the form of a mandatory information standard under the Australian Consumer Law. This paper asks whether this approach would adequately respond to the underlying conflict between various actors as to what free-range means. Conflict over the meaning of free-range on the label is the latest expression in an ongoing series of challenges, defences and counter-challenges to the legitimacy of intense, industrial-scale animal food production and particularly conventional cage egg production. This paper briefly explains how it is that the regulation of welfare of layer hens is now largely a matter of voluntary labelling for consumer choice rather than mandatory government regulation of animal welfare in production conditions. It goes on to critically evaluate whether the current network of voluntary regulation of free-range labelling adequately informs consumers about animal welfare conditions using data collected about the claims on egg carton labels between 2012 and 2014 to do so. It goes on to assess the potential of a mandatory information code or other consumer regulation to improve animal welfare labelling on eggs.

CONTENTS I Introduction II How Free-Range Became an Issue A No Ban on Battery Cages B Conflict over Free-Range C No Mandatory Labelling D The Ambiguous and Contested Definition of Free-Range in the Model Code E Consumer Protection Enforcement against Misleading and Deceptive Conduct III Explanation of Methodology IV Free-Range Claims on Australian Egg Labels and the Regulatory Network behind the Labels A Are Labels Improving Over Time? B Regulatory Standards That Lie behind Free-Range and Animal Welfare Claims on Labels? C Production Practices behind Free-Range V Assessment and Conclusion A How Informative Is the Information on the Free-Range Egg Label? B Have Production Practices Changed under the Voluntary Labelling Approach? C Is Misleading and Deceptive Conduct Regulation Adequate? D Would a Mandatory Standard Improve Free-Range Labelling? E Need for Revised Animal Welfare Regulation I INTRODUCTION

Consumers' intention to do the right thing is being exploited ... Their belief in the integrity of labelling is being destroyed. And their faith in the ability of consumers to elfect ethical change is being shattered. (1)

By the 1960s cage farming of hens had become the predominant method of egg production in the western world. (2) In conventional cage systems hens are typically kept in groups of five or six in wire cages with access only to water and a feed trough, no room to turn, move around, or stretch, and no opportunity to engage in instinctual behaviours such as dust bathing, scratching-.or pecking. Since they were first introduced, these 'battery' cages have been heavily criticised by animal rights activists as amongst the most industrialised and cruellest of animal food production practices. (3)

There have been some improvements in regulated animal welfare protections for caged hens over the years. These include government-mandated increases in cage size in many countries including Australia--although the total amount required is still less than one A4 sheet of paper per hen. (4) Some jurisdictions, including the countries of the European Union, (5) New Zealand, (6) and (in effect) California and Michigan (7) have now legally mandated the use of enriched' or colony' cages. These are larger cages with flaps to create a nesting box, perches and a scratch pad, which give the birds some opportunities to engage in natural behaviours. Australia has to date rejected the possibility of mandating such cages. (8)

Cage production (albeit enriched cages in some jurisdictions) remains the norm around the western world. The main policy response to concerns about the restriction of liberty involved in cage egg farming and the need for higher animal welfare production options is voluntary or mandatory labelling to allow consumers the opportunity to choose to buy non-cage eggs. (9) As a number of commentators have pointed out, '[t]here appears to be a general--albeit vague--agreement among political actors in many countries' that soft' regulatory mechanisms such as labelling and voluntary accreditation standards are more legitimate and effective than 'hard' regulation such as bans and regulatory limits for dealing with all sorts of concerns with the contemporary industrial food system. (10) Animal welfare in particular is seen as an 'ethical' issue with consumers expected to take responsibility for choosing animal food products in line with their own values. (11)

This approach presumes that the market will track consumers' ethical preferences and provide the appropriate range of choice. (12) It also assumes that appropriate private voluntary accreditation and supply contract standards are available to back up and verify the various choices on the label. Under this approach, in theory the only government intervention required is enforcement of consumer protection laws to avoid misleading labelling.

In Australia, voluntary labelling has attracted considerable controversy and there has been much conflict over the meaning of the term free-range. As a result, Australian state, territory and federal consumer affairs ministers jointly announced in 2014 that they were considering setting 'a national, legally enforceable definition of free-range eggs' (13) under the Australian Consumer Law ('ACL'), (14) in the form of a mandatory information standard, which would define free-range and probably also require that all eggs be labelled as 'cage', 'barn' or 'free-range'. (15) A consultation paper canvassing a number of options was released in October 2015. (16) This paper addresses the desirability of a mandatory information standard by evaluating the impact of the current voluntary labelling for consumer choice approach on the market for retail eggs.

Part II of this paper briefly sets out the regulatory policy context for the current contest over free-range claims on egg carton labels. This paper argues that free-range labelling has become an issue because of a lack of mandatory government regulation of animal welfare in egg production.

Part III of this paper sets out the methodological approach used to 'backwards map' contested free-range egg labels in order to evaluate the impact of the current voluntary labelling system. It does so by collecting data on (a) the animal welfare claims made on free-range egg carton labels in Australia between 2012 and 2014; (b) the various public and private standards for freerange and animal welfare behind the label claims; and (c) the range of animal welfare practices used to produce eggs labelled free-range. These data are used to evaluate the quality of information provided by free-range egg labels, whether or not they are making animal welfare practices in egg production more transparent, and whether labelling is associated with real change in the animal welfare standards in production of eggs in Australia.

Part IV reports the findings of this evaluation. It finds that eggs are already labelled 'cage', 'barn' or 'free-range' in retail outlets. This appears to have encouraged an expansion in sale and consumption of a range of choices of free-range labelled eggs, and some innovation in small-scale and higher anirdal welfare production. However, this means that the term free-range encompasses a wide--and confusing--variety of eggs produced under different conditions and different accreditation systems. Overall there have been only minor improvements in information about different free-range egg production systems, and probably only minor improvement in the production systems used by most large-scale producers.

Part V concludes that the current network of public and private regulation of the meaning of free-range is inadequate to accurately inform consumers and may not drive sufficiently deep or widespread change on its own. This is unlikely to improve under a mandatory information standard. Although Australian Competition and Consumer Commission (ACCC') enforcement action against misleading and deceptive free-range egg labelling is welcome and necessary, it is not sufficient to rely on consumer protection enforcement alone. A more sustainable system for animal welfare regulation is required, one that allows for multi-stakeholder input into a legitimate, transparent process with standards that are properly monitored and enforced. Substantive changes to, and greater enforcement of government regulation of, farm animal welfare in Australia is urgently needed.

II HOW FREE-RANGE BECAME AN ISSUE

Over the last 20 years Australian governments have minimised their involvement in regulating animal welfare in food; especially in egg production or animal welfare claims on labels. This does not mean a regulatory vacuum. Rather it means there is a network of public and private actors who sometimes compete, sometimes contest and sometimes complement each other in regulating animal welfare through voluntary and contractual accreditation standards, labelling claims, minimal government regulation of animal welfare practices and recently, consumer protection enforcement against misleading and deceptive conduct in advertising and labelling.

A No Ban on Battery Cages

In 2000, despite decades of active campaigning by Australian animal advocacy organisations and strongly felt public opinion, (17) Australia comprehensively rejected the possibility of banning conventional cages or requiring enriched cages for layer hens. (18) Instead, Australian state, territory and federal governments adopted a policy of 'industry-led consumer choice' in which cage, barn and free-range eggs would be clearly differentiated and labelled...