State and territory ministers have agreed to a New South Wales proposal to develop a national standard for free-range eggs.

New South Wales Fair Trading has been pushing for a national standard after an investigation found current arrangements are ambiguous and could potentially mislead consumers.

The ministers agreed to the proposal at a meeting in Cairns, with New South Wales to take a leading role in developing a draft National Information Standard for free-range eggs.

Currently, only the ACT and Queensland have standards for free-range and there is no enforceable national standard.

In the ACT, a stocking density of 1,500 birds per hectare can be called free-range and Queensland recently raised its definition from 1,500 to 10,000 birds per hectare.

NSW Fair Trading Commissioner Rod Stowe says a national standard is needed to respond to growing consumer demand in the face of confusing and potentially false and misleading claims in the market.

"This is a good first step on the road to getting better outcomes for consumers when it comes to egg labelling," he said.

"NSW Fair Trading will now lead further work on this important consumer issue and expects to report back to ministers at their next meeting in early 2015."

Consumer group Choice has welcomed the move.

"Our super complaint to NSW Fair Trading last year pointed out that while close to 40 per cent of the egg market is free-range, the egg industry has admitted that many products labelled free-range fall foul of the existing voluntary definition," Choice director of campaigns and communications Matt Levey said.

"This means a large number of consumers are shelling out for free-range duds, paying double the price of cage eggs, without having any confidence these products meet their reasonable expectations.

"It's great to see the law will finally be laid down on what free-range really means and we congratulate NSW Fair Trading for leading this process.

"The crucial next step is ensuring the new standard reflects consumers' expectations and the best advice of animal welfare experts, ensuring it is not only nationally consistent and enforceable, but meaningful."

Queensland Attorney-General Jarrod Bleijie, who attended the meeting in Cairns, said there will be a cautious approach to developing the standard.

"They'll develop some proposals that the ministers will be able to look at," he told the ABC.

"The jurisdictions weren't keen to rush into anything at the moment, because there are some prosecutions on foot at the moment through the ACCC.

"And until we have some jurisprudence in that area, we don't know whether the current laws are effective or it needs changing so we're taking a cautious approach at the moment."

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