The Australian Competition and Consumer Commission (ACCC) is going to the Federal Court alleging barn-raised chickens are not 'free to roam' and companies that say otherwise are breaking the law.

In its own words, "the ACCC alleges that the population density of meat chickens raised in barns preclude such movement."

It is alleging misleading or deceptive conduct by Baiada Poultry, Turi Foods and the Australian Chicken Meat Federation.

According to ABC News, Baiada Poultry says it will strongly refute the ACCC allegation. The other companies have declined to comment.

In each case the ACCC says the companies have implied their chickens have substantial space to roam around freely.

In a case that will be watched closely by campaigners who want regulation of terms such as 'free-range', the ACCC wants the court to impose penalties and to order the companies to publish corrections.

Director of the Humane Society International, Verna Simpson, says she is glad to see some action being taken to test the claims of poultry companies.

"We have lodged so many complaints but no action has ever been taken," she said.

"So I am so thrilled to hear that they're finally going to do something. The word 'free', obviously all the producers know that that's the word everyone looks for now, so they insinuate it where and how they can."

Chicken farmers can have their farms certified as 'free range' in Australia, but it costs money and there is little to stop the term or similar terms being exploited by companies that use caged chooks or barn-raised hens.

Spokesman for consumer group Choice, Ingrid Just, says the ACCC action shows the need for a legal standard for free-range products.

"Consumers need to have confidence that any product labelled as 'free-range' meets expectations in relation to animal husbandry standards," she said.

"This is part of the list of draft recommendations that come from the Independent Food Labelling Review Panel.

"At the moment there is not an Australian standard on ['free-range'] products, and what we do know is that consumers are paying premiums for these types of products.

"But in actual fact there can be no absolute guarantees as to the true free-range nature of the products that they're purchasing. I think labelling is certainly lagging behind consumer understanding."

Ms Just says there are many examples of egg labels which are designed to grab the attention of the ethically-minded shopper.

"We've seen an interesting example only recently where one of our shoppers alerted us to products that were being sold as 'farm range' - so eggs that were farm range at a farmers' market," she said.

"And if you lifted the expiry date sticker then you could see underneath that sticker the words 'caged eggs'.

"So you can see the amount of confusion out there and the difficulties that consumers have when they're reaching for products that they assume to have been produced in a particular way, but in actual fact that may not necessarily be the case."

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