"In June, the meeting of federal, state and territory Consumer Affairs Ministers agreed this consultation paper would be the first step in identifying what further action may be required to offer consumers assurance that their free range eggs are labelled correctly," Minister for Small Business and Assistant Treasurer Kelly O'Dwyer said.

"Our aim is to balance consumers' need for clear and accurate information with any potential red-tape burden for producers and retailers."

The government will use the consultation to help prepare laws for egg labelling, which could include greater levels of explanation for producers and consumers, as well as the possible creation of specifically-defined labelling categories, such as 'premium free range' and 'access to range'.

The consultation looks at three options, including maintaining the status quo, an information standard for free range eggs, or an information standard for all eggs.

Green Party Senator Lee Rhiannon said only a high labelling standard would bring an end to what she called 'deception' of consumers, but said that keeping things as they are would not be an acceptable outcome.

She added: “The consultation paper includes two new labels that would potentially dilute the ‘free-range’ category and confuse consumers.

“Even the ‘premium’ free-range label allows painful de-beaking, despite being targeted at consumers who want to escape the appalling treatment of animals."

How are free range eggs regulated at the moment?

Currently, free range egg labelling is regulated by the Australian Competition and Consumer Commission (ACCC), which has released a new guide to the rules to coincide with the consultation.

ACCC decides whether labels are misleading or deceptive, which includes the use of pictures as well as words like 'free range', such as images of hens roaming in a field.

“If it is not normal for most of the hens to leave the barn and to move about freely on an open range on most days, making a free range claim is likely to be misleading. This approach accords with common sense,” ACCC Chairman Rod Sims said.

“The ACCC acknowledges that laying hens may spend periods indoors and we do not expect to always see hens on the range or expect every hen to be outside every day.

“Indeed, the ACCC does not expect farmers to use a precise approach of tracking hens or head counts. A common sense approach of simply observing that the range is in regular use by a significant proportion of hens on most days is likely to be sufficient.

“On the other hand, we reject claims that it is acceptable to tell consumers that eggs are from free range hens when the outdoor range is not regularly used by the hens – whether this is the result of farming practices or for any other reason.”

The deadline for submissions to the consultation is Monday 2 November.