''We need to mandate responsible labelling that sets out the method of production used. It will protect genuine free range farmers. It will prevent misleading and ambiguous labelling and it will also provide consumers with the transparency and clarity in labelling that they need.'' The definition of free range eggs is also being questioned, with free range egg producers threatening to ask the ACCC to conduct a separate investigation into the industry. The legally enforceable Domestic Poultry Model Code of Practice sets out the different production methods for chicken meat and eggs as: organic, free range, or from birds kept in large sheds. Eggs can also be produced from caged birds. But, in the past year, descriptors like ''barn laid'', ''free to roam'' and ''cage free'' have proliferated on packaging and in advertising. Consumer advocates and animal welfare activists believe companies have introduced these ''feel good'' marketing terms to exploit the consumer propensity to buy ethically and to pay more for such products.

A third of eggs and 12 per cent of chickens sold are free range. Free range chicken can cost 20 per cent more than barn-reared chicken, according to Choice. ''We're seeing more and more products carrying these labels,'' a Choice spokeswoman, Ingrid Just, said. ''Companies know consumers are willing to pay more for products of the animal husbandry standards that these terms imply … Consumers have a right to know that their expectations according to the labels are met.'' The Blewett review of food labelling laws released in January recommended livestock industries consider adopting agreed Standards Australia definitions for production methods. The Australia and New Zealand Food Regulation Ministerial Council will meet in December to agree on its response. The poultry industry favours self-regulation, but consumer and animal welfare advocates want state and federal laws. ''Only the Parliament can protect the rights of consumers and free range farmers,'' the NSW Greens MP John Kaye said. The chicken meat industry argues it has been using ''free to roam'' for at least a decade to make it clear birds reared in barns are not kept in cages. A survey by the Australian Chicken Meat Federation last year found more than 80 per cent of Australians believe the meat is grown in cages.

But the ACCC alleges that ''free to roam'' implies the chickens have ''substantial space available allowing them to roam around freely''. It says the 40 kg per square metre stocking density - which equates to as many as 20 birds per square metre - permitted under the code ''precludes such movement''. Animals Australia wants chicken meat produced this way called ''factory farmed in sheds''. Baiada intends to fight for its right to use ''free to roam''. ''We genuinely believe that the phrase 'free to roam in large barns' is an accurate description that conveys our farming methods to the public,'' the managing director, John Camilleri, said. The Sun-Herald understands other chicken producers are willing to drop the use of the term rather than go to court, even though they say barn-kept birds can move as much as 80 metres a day. KFC has already dropped ''free to roam'' from advertising. In a separate development, free range egg producers are threatening to go to the ACCC if the Egg Corporation persists in allowing free range farmers to run as many as 20,000 laying birds per hectare, the equivalent of two birds a square metre. Laying birds need more room than meat birds as they tend to be more aggressive. The Australian Free Range Egg and Poultry Association president, Phil Westwood, said: ''Under the Egg Corp definition, consumers would be paying for something they wouldn't be getting as no one believes that definition would be free range.''

The Greens have introduced legislation into parliament to create a mandatory standard for eggs sold as free range. Stocking densities would be set at 750 birds per hectare and beak trimming banned. Companies that falsely label eggs free range could be fined up to $55,000. ''It stops the myth of 'barn laid' and 'roam free','' Dr Kaye said. ''That is marketing, that is not communicating a standard of animal welfare.'' Follow Environment on Twitter