Laws forcing Canberra supermarkets to display signs on shelves outlining the density of free-range eggs are now in place, with the ACT the only jurisdiction to legally impose its view on what constitutes a free-range egg.

Key points: The ACT has gone alone in demanding "free-range" be defined as 1,500 hens per hectare

The ACT has gone alone in demanding "free-range" be defined as 1,500 hens per hectare Businesses will be fined up to $40,000 for failing to display which eggs comply

Businesses will be fined up to $40,000 for failing to display which eggs comply Signs placed near eggs will help clear up any consumer confusion, according to the new rules

Commonwealth laws that came into effect in 2018 allow eggs produced on farms with a stocking density of up to 10,000 birds per hectare to be labelled as free-range.

The ACT is the only jurisdiction that believes that definition is wrong, and says the threshold should be 1,500 hens per hectare.

Sidestepping the more relaxed national egg regulations, they have argued that mandatorily advertising a tighter threshold for free-range products would give consumers a more informed choice and was better for animal welfare.

"This is the standard supported by the RSPCA, by CHOICE and by the Humane Society," ACT Consumer Affairs Minister Shane Rattenbury said.

"That's what we think Canberra consumers think is the right answer."

"We don't believe the [10,000 birds per hectare standard] gives the birds a genuine free-range environment, an environment where they can exhibit natural behaviours."

The new rules mean eggs will be separated on the shelves according to density.

The ACT Government says federal labelling laws mislead consumers. ( Supplied: ACT Government )

Non-compliant businesses face hefty fines

Supermarkets have had months to make the mandatory change, after the legislation passed six months ago, with the laws now in effect.

Government workers from Access Canberra have started visiting businesses to enforce the rules — and the cost would be up to $40,000 if a business fails to comply.

Canberra free-range egg producer Greg Palethorpe said it could be unclear for consumers to work out what was genuinely free-range and what was not and he believed signs would help to clear up confusion for shoppers.

"I think it's really useful to educate consumers and let consumers know what they're actually buying," said Mr Palethorpe, who runs a small chicken farm on the outskirts of Canberra, supplying local farmers markets and stores.

"Otherwise it's very difficult to tell. It's always in very, very small writing on the packets."

Mr Palethorpe said the Federal Government had ignored advice from smaller free-range farming bodies and instead listened to big business.

"I think it's primarily got to do with larger egg producers being able to lobby government to get the things that they want," Mr Palethorpe said.

Mr Rattenbury said the ACT Government was remaining true to its values by taking on the new system.

"I think many people would find this quite unusual, for the government to put in place mandatory requirements to convey a view on what we think the standards should be," Mr Rattenbury said.

"But I think this is an important issue and it's one the Canberra community has expressed strong views on over the years, so we want to make sure they have access to the information that we think they need."