Consumer advocacy group Choice has lodged a so-called super complaint to New South Wales Fair Trading about the labelling of free range eggs.
Choice claims consumers are being misled by the labelling of free range eggs while in some cases paying nearly double for them.
The group says about 40 per cent of eggs sales in Australia appear in the free range market with research showing consumers expect the hens to have had access to the outdoors and space to move around.
But it says there is a huge variation in conditions between producers.
Spokesman Tom Godfrey says the problem is that while there is a code governing free range egg production, it is not enforced.
"You can have the term free range applied to eggs that have been produced at a stocking density of 1500 birds per hectare or 20,000 birds per hectare," he said.
"You've got no way of knowing if those birds are tightly packed in a paddock or whether or not they are free range."
Choice says its super-complaint "recognises that food labelling is an important means of communicating product information to consumers".
It has called on Fair Trading to take action to give consumers confidence in the free range labelling system.
A spokesman for the NSW Fair Trading Minister Anthony Roberts says it will look into the complaint and will report back to Choice within a 90 day period.