Australia's competition regulator has sued the country's biggest egg supplier, Sunny Queen, and 11 other producers, alleging they operated a cartel that coordinated the production and supply of eggs to Australian supermarkets for many years.

The Australian Competition and Consumer Commission (ACCC) alleges the companies coordinated on production volumes, distribution, expansion plans and the culling of hens to manage what they perceived as oversupply, conduct it says likely substantially reduced competition since at least October 2020.

The civil proceedings, filed in the Federal Court on 13 October, seek declarations, penalties, injunctions and costs.

Sunny Queen has denied the allegations and said it intends to defend the proceedings. The claims are untested, and the regulator has not said when the case will be heard.

"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, adding that anti-competitive conduct can leave consumers facing "reduced choice and higher prices".

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Sunny Queen holds about a third of the national market for supplying eggs to retailers, according to the ACCC, and is jointly owned by two of the other producers named in the case, Ellerslie Free Range Farms and McLean Farms. The regulator alleges the industry is highly concentrated, with a few large suppliers and steep barriers to new entrants.

Among the episodes alleged, the ACCC says Sunny Queen, Doug Hall Poultry and McLean Farms coordinated to buy a property at Pittsworth, in Queensland, to keep it out of the hands of rival egg suppliers.

It also alleges that Sunny Queen restricted how many eggs rival Kinross Farm could sell, and prevented Kinross from supplying Coles, Woolworths, Aldi, Metcash and Costco.

The case is the first brought by the ACCC to include allegations of a concerted practice — cooperation between businesses that goes beyond acting independently in response to market conditions — since such conduct was prohibited under Australian law in 2017.

The alleged conduct predates the shortages that pushed eggs up the shopping list for many Australians. An outbreak of H7 bird flu from mid-2024 forced the culling of more than 1 million birds, cut daily egg output in the major producing state of Victoria and prompted Coles and Woolworths to cap how many cartons shoppers could buy.