A LEADING duck meat supplier has been ordered to pay $400,000 by the Federal Court for misleadingly using the phrase "open range".

Pepe's Ducks, which supplied about 80,000 ducks a week in Australia last year, has been fined for using the phrases "open range" and "grown nature's way" on packaging, its website and vehicles.

The Federal Court have also restrained the company from using those phrases for the next three years, prevented it from using a picture of a duck outdoors unless it has the words "barn raised" positioned nearby and ordered it provide corrective notices to customers, on its website and business premises.

The court fined the company $375,000 in civil penalties and $25,000 costs.

Australian Competition and Consumer Commission commissioner Sarah Court said the penalty was a warning to businesses to make sure they were not misleading consumers into paying premium for products that don't match the claims on the label.

A Pepe's Ducks statement said the company had changed its farming practice to barn raised after the global avian flu outbreak to provide the ducks with a healthy and comfortable environment.

It said the company had been working with the ACCC to correctly describe its products as barn raised and had not intended to mislead its customers.