Farm Pride win brings ACCC egg cartel case to a sticky end
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The competition regulator has egg on its face after losing an alleged cartel case against ovum producer Farm Pride Foods.
The Australian Competition and Consumer Commission started proceedings against Farm Pride, another company, industry body the Australian Egg Corporation (AEC) and three individuals in May 2014, claiming they were trying to induce farmers to cull hens to reduce egg supply.
The ACCC alleged that from November 2010 the AEC encouraged its 100 to 150 members to cut egg numbers in order to avoid oversupply — a move it claimed the companies and individuals were involved in.
It also alleged that in February 2012, the AEC held an ‘Egg Oversupply Crisis Meeting’ attended by egg producers in Sydney, where it allegedly sought a co-ordinated approach by egg producers to reduce the supply of eggs.
The Federal Court ruled in favour of Farm Pride (ASX:FRM) in February 2016, and today (September 26) ruled against an appeal by the ACCC — and ordered it to pay costs.
Farm Pride, which has been contacted for comment, has always denied the allegations.
After the court found in its favour, Farm Pride’s share price surged to a peak of $2.60. It’s since fallen back to $1.04.
Farm pride took a hit in February after announcing an oversupply of eggs, even though it still made a half-year profit.
Full year accounts showed a $8.48 million profit, up 4.3 per cent from last year, and a jump in cash holdings from $3.4 million to $8 million.