An egg farmer who admitted duping consumers by passing off caged eggs as free range claimed the practice is widespread.
John Garnett was sentenced in the Whangarei District Court yesterday after he admitted to the Commerce Commission that his company packaged about 206,000 dozen - 2.4 million - caged eggs into different packages over 20 months that earned him an additional $376,000.
In sentencing the former director of Forest Hill Farm at Waikaraka to 12 months home detention and 200 hours community work, Judge Duncan Harvey noted what he described as a "disturbing comment" by Garnett that such conduct was common in the egg industry.
The Northern Advocate has learned that there are no regulations that control the definition of a free range egg, and consumers are reliant on the honesty of egg farmers to identify eggs correctly.
Between April 2010 and November 2011, Garnett was responsible for packaging cage eggs into cartons labelled as "free range" or "barn-laid". They sold them to 38 retailers, including supermarkets in Northland and Auckland, which led to about 200,000 people buying what they thought were free range eggs.
His offending came to light after egg marketing group, Independent Egg Producers' Co-op, lodged a complaint with the commission after expelling Forest Hill Farm as its member.
Forest Hill Farm has since gone into receivership.
Garnett earlier pleaded guilty to 20 counts of obtaining by deception. No reparation was ordered as none had been sought by the Commerce Commission.
Judge Harvey said the court needed to hold Garnett accountable for deceiving his suppliers and the public at large.
He said Garnett decided to embark on massive fraud in order to save his business and its 20 employees - a conduct that was likely to diminish public confidence in the egg industry.
However, Judge Harvey said had it not been for Garnett's guilty plea, his voluntary return from Australia and his co-operation with the commission's investigation, he would have gone to prison.
Claire Paterson, representing the commission, said Garnett embarked upon a serious and sustained deception of an important grocery item plainly designed for commercial gain.
The offences were committed after business hours or at Garnett's home to conceal them from his staff.
He told his farm manager that such a conduct was profitable and justified it by saying that others in the egg industry were doing it, she said.
The commission said it didn't oppose a sentence of home detention if the judge decided to impose one.
Garnett's lawyer Julie Young said her client has had a long-standing business reputation in the community and that he was remorseful.
The commission's consumer manager Stuart Wallace said Garnett's conviction and sentence sent a clear message to the business community that those intending to defraud the public would be caught and the penalties could be serious.
"Consumers who purchased these eggs were subject to a serious breach of trust by the trader. It's likely that consumers who purchase free range eggs do so as a matter of principle, as they are significantly more expensive than cage eggs.
"We think consumers are entitled to trust what traders tell them, particularly where the consumer has no way of independently verifying the claims being made," he said.