Products that claim to be have a “premium attribute” need to match consumer’s expectations, the consumer watchdog has warned.

The warning to businesses comes in the wake of last week’s decision to fine egg producers Baiada Poultry and Bartter Enterprises $400,000 for misleading advertising relating to free range eggs.

The Federal Court ordered the companies, which are the processers and suppliers of Steggles branded chicken products, to pay the fine for misleading claims on product packaging which suggested their chickens had been “free to roam”.

In reality, the chickens had less than an A4 sheet of paper of floor space each.

The Australian Chicken and Meat Federation, the industry’s peak body, was also ordered to pay $20,000 in penalties.

The court ruled ACMF had also engaged in false, misleading or deceptive conduct when it claimed in publications on its website the meat chickens produced in Australia were “free to roam” or able to “roam freely” in large barns.

ACCC chairman Rod Sims said in a statement consumers need to be able to trust that products match their descriptions when making purchasing decisions.

“Credence claims, which represent that a product possesses a premium attribute, are a priority area for the ACCC; particularly those in the food and beverage industry with the potential to influence consumers and disadvantage competitors,” Sims says.

“Consumers are increasingly making purchasing decisions that value the types of claims that directly affect the integrity of the product, such as where or how something was made, grown or produced.”

Hall and Wilcox partner Sally Scott says businesses need to consider whether or not a claim is misleading when making advertising decisions.

“This will firstly involve consideration of the overall impression conveyed to consumers and secondly whether that overall impression is misleading,” she says.

“Failing to analyse whether there are misleading claims at this time will be fraught with risk. Indeed, it would be a brave or naïve business that proceeds with branding packaging or promotional activities without giving sufficient consideration to whether they are making misleading claims.”

Scott says the real issue is how consumers interpret the representation of a product, be it intentional or accidental.

“Whether a term is used as part of a brand name or elsewhere in relation to a product, the issue is still what overall impression is conveyed to consumers and whether that impression is misleading.”

The ACCC has been actively pursuing false credence claims this year. In March, the consumer watchdog initiated court action against Luv-a-Duck over free range claims and late last year Pepe’s Ducks was found guilty of claiming its ducks were “open range”.

Pepe Ducks was ordered to pay a fine of $400,000.

Other claims the ACCC has been targeting include “organic”, “Australian Grown” and “freshly baked”.

In June the ACCC launched proceedings against Coles for advertising its bread as “freshly-baked” in-store, when in reality its products were actually partially baked in Ireland, frozen and transported to be finished in-store.