The Serious Fraud Office (SFO) has confirmed it is investigating.
The Newsroom website is reporting this morning that millions of caged eggs were sold by Palace Poultry as free range.
Countdown supermarket has pulled Palace Poultry eggs from its shelves as a result.
Consumer New Zealand spokeswoman Jessica Wilson said there needed to be more scrutiny either by the retailers which sold the eggs or the Ministry for Primary Industries should carry out certification when it undertook checks on farms.
She said the Palace Poultry report was the second case in the past few years of eggs allegedly sold as free-range but that were actually caged hen eggs.
"Consumers need to have confidence in what they are buying."
While there were a number of third-party assessors who look at eggs including the organic certification scheme and the SPCA's Blue Tick there was no government oversight.
"Outside of those schemes there is no official government scheme."
Wilson said consumers who were concerned about what they were buying should look to see if there was independent certification.
"If you can't find any of those you can ask the retailer about the eggs."
Wilson said those who could not get assurance about whether the eggs were free-range should buy eggs elsewhere.
Jacqui Dean, Minister of Commerce and Consumer Affairs, said it's up to the Commerce Commission to investigate claims and take action if needed.
"This is the case for any product, regardless of there is a certification system or not," Dean said.
"The Commerce Commission is responsible for enforcing the Fair Trading Act. Consumers need to be informed about what products they are purchasing and I would encourage people to be vigilant and report any case of misleading practices they might see."
The Commerce Commission said it referred the case to the SFO.
