Countdown is removing eggs sourced from a farm implicated in footage showing dead rotting hens in their cages.
Animal advocacy activists released the footage of the Waikato colony egg farm yesterday.
Today, Countdown has announced it will be taking off the shelves all its eggs sourced from the Waikato farm until it can be sure the farm's practices are up to scratch.
Spokesman James Walker said none of its eggs came from the farm's colony caged hens, but fourteen of its stores did stock a small number of its conventional caged eggs.
"We are hopeful that other retailers stocking this brand will seek the same reassurances.
The footage shown is disturbing and disappointing to us."
Mr Walker said Countdown expected all its egg suppliers to meet appropriate welfare standards and to comply with the Animal Welfare (Layer Hens) Code of Welfare 2012.
He added the company was getting in touch with all its egg suppliers today and reinforcing the importance of complying with the Code of Welfare, as well as the supermarket giant's own animal welfare expectations.
The animal rights group Safe said conditions on the farm were so bad that of four hens rescued, two later died from their injuries.
Safe executive director Hans Kriek said people would be shocked that the facility used colony cages, which are being phased in as a "humane" alternative to standard battery cages.
"This investigation not only reinforces the cruelty of caging hens for life, but also exposes attempts to dupe consumers into buying eggs produced by animals that have led a life of torment," he said.
"Customers at supermarkets ... will be buying eggs from colony cage farms like this without even knowing they come from caged hens. There is a concerted effort to avoid revealing the truth to consumers. It is a scandal."
John Darroch from Farmwatch said he was shocked by what the group witnessed.
"Birds were trapped under perches that are supposed to offer welfare improvements and left to starve to death. You cannot look at these poor hens crammed together and morally justify the lives they are forced to lead.
"Cage eggs may be cheaper, but it is the birds that are paying a dreadful price. Hens in colony cages are no better off than those in battery farms."
Green Party animal welfare spokesperson Mojo Mathers called on the Government to end the use of colony cages, saying they could be as bad as the old battery cages.
"Colony cages are cruel and they use should not be seen as a better replacement to battery cages," she said.
"Chickens living in colony cages are living in miserable conditions. It is just Government spin that they are an acceptable alternative to battery cages.
"Being confined in cramped cages is a cruel way to keep hens. New Zealanders care about animal welfare, so we should be moving away from battery and colony cages to cage free systems."
Ms Mathers said New Zealand had committed to getting rid of battery cages by 2022, so spending millions of dollars to replace them with "equally cruel" colony cages did not make sense.
"Austria, Germany and Switzerland have already set phase-out dates for colony cages. Their phase-out dates will take effect around the time that we move into colony cages making New Zealand seem ethically backwards in the eyes of international consumers.
"By continuing to use cruel cages for egg laying we are missing an opportunity to make real ethical changes. Cage-free is the best way to go."
This afternoon, a Ministry for Primary Industries spokesman said the ministry worked quickly with the operator of the poultry farm to address animal welfare issues when a complaint was made last month.
That included making an unannounced inspection of the farm and investigating the site for two days.
"The footage that has been released to the public is not acceptable practice. Ministry inspectors did not directly observe all of the issues displayed in the footage. However, the detailed investigation did reveal that some minimum standards were not being met."
This included overcrowding in some cages, removal of dead birds and the farm's inspection of live birds.
The threshold for prosecution was not met, but there were grounds for the ministry to order action to ensure standards were met. They had continued to work with the farm and were satisfied the problems had now been fixed.
"This involved a thorough review of the farm's systems to ensure it addressed the identified issues around frequency of stock checks, overcrowding of individual cages and removal of dead birds from cages."
Follow-up checks would continue, the spokesman said.
When the ministry investigated a complaint its first priority was to mitigate the suffering of animals and ensure there is no repeat.
"Laying charges is not always the best solution for the animals' future."
The Code of Welfare for Layer Hens was developed by the National Animal Welfare Advisory Committee and included rules for the housing of chickens, and included minimum standards for colony cages, including the size of the cages and space for perching, nesting and scratching.
The committee consulted the public, and considered international best practice, scientific evidence, and available technology.
MPI's approach to animal welfare prosecutions has resulted in more prosecutions since it was formed in 2012, the spokesman said.
In 2011, nine animal welfare prosecutions were taken, in 2014 that number had almost tripled to 26.
"It is our understanding that the farm in question is an export and domestic site that is audited quarterly by MPI. We are aware that MPI has investigated the issues raised by SAFE and that corrective action has been taken at the farm."
The results of the investigation had not yet been made available.