Terry Fletcher of Palace Poultry has denied reports that he onsold caged eggs as free-range.

The SFO on Monday confirmed it was investigating allegations that Palace Poultry had sold millions of caged eggs as free-range.

Palace Poultry supplies eggs to Countdown, which removed Palace Poultry eggs from its shelves on Monday after it became aware of the issue.

Fletcher said the invoices displayed on the Newsroom website which showed the eggs were billed as "caged" were not correct.


Speaking on RNZ's Checkpoint today, Fletcher denied all the allegations levelled at Palace Poultry.

"We onsold in good faith," he said.

"Those invoices are concocted out of thin air. We supplied our invoices to the SFO which don't look like the ones on Newsroom."

Fletcher said he was limited in how much he could say due to the active SFO investigation.

Zeagold eggs, the company that operates the Woodlands and Farmer Brown brands, said it had purchased eggs from Palace Poultry in the last year, and was now "extremely concerned" that the eggs received were not free-range.

"We paid Palace Poultry free-range egg prices for free-range eggs," the company said.

"We are now extremely concerned that what we believed we were getting is not what we got."

Zeagold said as soon as it was made aware of the investigation by the SFO, it pulled all of the eggs from Palace Poultry, saying it was able to verify that there were currently no Palace Poultry eggs in its supply chain or for consumer sale under its brands.

Zeagold is owned by Dunedin-based Mainland Poultry. Its managing director and chairman of the Egg Producers Federation, Michael Guthrie, said he was absolutely devastated.

"The first we knew about this was on about the 6th or 7th of February. We were notified by the SFO that they were conducting an investigation into Palace and wanted to talk to us about how we interacted with that company," Guthrie said.

"That day we pulled any business, which wasn't a lot, from them and any eggs we had from them at that time, we treated as ordinary eggs, not free-range."

Guthrie said less than 3 per cent of Woodland eggs came from Palace in the last year, but given the company was allegedly selling caged eggs as free-range, it was likely some of its caged eggs would have ended up in Woodland cartons.

He said although the company could verify all eggs currently for sale were free-range with no eggs from Palace Poultry, the company's brand was still likely to be affected by the fallout.

"It is a huge betrayal but we're the ones who are going to pay for it," Guthrie said.

"We're not the only ones and we're actually a very small part of this but we have a high profile, it's a big brand and I tell you, I have never had such an upsetting day than I've had dealing with this."

Egg Producers Federation executive director Michael Brooks said the industry had no tolerance for ''ratbags'', and said the Federation was looking into egg stamping on farms to distinguish between caged and free-range eggs.

Brooks was confident the issue was isolated to the one farm.

"It's a relatively small industry; 126 farms, so the industry sees this sort of thing as a real betrayal. If something is happening it will come out," Brooks said.