Dive Brief:

• A federal lawsuit claims Walmart has deceived customers who buy its Organic Marketside brand eggs, according to Reuters. The suit, filed by a customer, says the eggs claim to come from hens given "outdoor access," when in fact the birds are only given access to a screened-in structure that lets in air from outside. 
• The lawsuit notes that "the theoretical ability to view the outdoors is not the same as having access to it." Walmart, in an email to Food Dive, stated: "We hold our suppliers to high standards and are committed to providing our customers the quality products they expect.  We take this matter seriously.  Once we have been served with the complaint and have reviewed the allegations, we will respond with the court." 
• The complaint underscores lingering tensions in the organic egg industry. In 2016, the U.S. Department of Agriculture under the Obama administration proposed a rule that would define outdoor access as any open-air area made up of at least 50% soil. In December, however, the agency, now under the Trump administration's purview, withdrew the proposal.

Dive Insight:

The lawsuit against Walmart comes less than a month after the U.S. Department of Agriculture withdrew the Organic Livestock and Poultry Practices (OLPP) rule establishing animal welfare standards for organic agriculture. Proposed in 2016 under the Obama administration, the rule would have established a stricter standard for outdoor access and space provided to animals, including egg-laying hens.

At the time, the USDA wanted to bolster consumer confidence in organic meat and dairy products. According to the agency, half of organic eggs come from industrial operations that provide screened-in porches for hens, which qualifies as outdoor access under the current standard. That's not in keeping with consumer expectations for organic: According to a recent Consumer Reports survey, 80% of regular organic consumers say its important that organic eggs come from hens given access to the outdoors.

For years, the USDA had established animal welfare rules geared towards strengthening the organic label, but the Trump administration reversed course with its decision, arguing the standard doesn't allow "broadly prescriptive, stand-alone animal welfare regulations."  

Some industry observers predicted the administration would side with large-scale meat and poultry companies and trade organizations. A USDA report issued in January projected it would cost those producers between $8.2 million and $31 million per year to comply for the first five years of the rule. That contrasts with $670 million in organic egg sales and $494 million in organic poultry sales in 2015.

However, the USDA also estimated that egg producers would see benefits from the rule between $4.1 million to $49.5 million annually.

Legal challenges from organizations like the Organic Trade Association will attempt to reverse or disrupt the USDA's ruling. Meanwhile, the lawsuit against Walmart serves as a reminder that retailers are in the crosshairs, too, if consumers believe they're misrepresenting the organic standard.