Farmers who don't allow chickens to roam freely outside most days could soon be prevented from labelling their eggs "free-range".
State consumer affairs ministers agreed on Friday there should be a national standard that restricts which farms can use the label.
It follows recent court findings that consumers expect free-range hens to be able to move about freely on an outdoor range on most ordinary days.
The ministers have requested a draft national standard that outlines when farmers can use the term and includes other possible categories for those who don't meet the requirements.
It will be considered by them by the end of the year.
Federal Small Business Minister Bruce Billson said it was important producers and retailers had clarity over what could be considered false or misleading labelling.
Egg Farmers of Australia welcomed the announcement, saying investment in the free-range sector had slowed because farmers were confused about the label's definition.
"We want to make sure consumers get what they are paying for," spokesman John Coward said in a statement.
The group believes the new standard should apply to hens not confined within a ventilated hen house and which have access to and are free to roam around an outdoor range during daylight hours.
