A ruling on free-range eggs in New South Wales will set a precedent for future cases across Australia, the consumer watchdog says.

Pirovic Enterprises was fined today for misleading and deceiving consumers over claims its eggs were free range.

The Australian Competition and Consumer Commission (ACCC) chairman Rod Sims said it was a profoundly important judgement because it rules that hens have to be able to go outside each day in order for their eggs to be classified as free range.

"It'll set a precedent for future cases," Mr Sims said.

"Indeed I would say to all free-range producers, they either need to meet this new standard or stop using the term free range.

"If not they'll find the ACCC will be in touch with them."

Mr Sims said other egg producers will now have to following this ruling.

Currently, there is no national standard for what constitutes a free-range egg.

Certification standards are set by a range of industry bodies and are only voluntary requirements.

Mr Sims said the ruling is a win for the consumer, adding people deserve to know what they are buying.

"You're basically paying double the price for free range eggs," he said.

"Consumers expect that to mean something, and I think what they expect it to mean is that the birds really are free range, they really are able to go outside every day."

Egg producer fined for 'misleading and deceiving' customers

The Federal Court has found Pirovic Enterprises incorrectly marketed its eggs as free-range because its hens were unable to move freely on open ranges.

The ACCC took the company to court because of its marketing on its cartons and website.

Justice Flick told the Federal Court that Pirovic could not justify its claims because of stocking density and flock sizes in its barns.

He ordered the company to pay $300,000 and establish a trade practices compliance program.

Outside the court Verna Simpson from Humane Society International said she was not surprised by the outcome.

"I would have expected a higher fine than that, but I suppose it's because he accepted the liability," she said.

The Federal Court heard late last month that both parties reached an in-principle agreement to settle the case.

Justice Flick told the court that this played a considerable role in determining the judgement and penalty.

Pirovic issued a statement which said the adverse findings related to packaging and farming conditions that were phased out in January 2014.

The company said it had already voluntarily committed to upgrading its free-range sheds and changing its free-range farming practices before the ACCC launched the proceedings.

Pirovic said the case highlights the need for a mandatory and uniform standard for free-range egg production to provide certainty for consumers and egg producers.