The consumer watchdog has declared there is "no need" for a free range egg standard in Australia, shocking egg producers and consumer advocates, who are both in the midst of developing such a standard with ministers in every state.

Rod Sims, chairman of the Australian Competition and Consumer Commission, said producers should instead use commonsense and rely on court rulings to avoid misleading shoppers with their labelling.

Free-range eggs: It depends on your definition. Credit:Jessica Shapiro

"Some have expressed concern there is no government standard that producers need to meet to be a free-range producer. We see no need for any standard," agricultural forum in Melbourne on Thursday.

"In the Pirovic case [in September] the court ruled free range means the birds can, and do, go outside on most days. It is up to producers to determine how to meet this commonsense definition."