The SPCA says a new animal welfare code for hens should get rid of cages altogether.
The code was released on Thursday and calls for battery cages for egg production to be phased out within 10 years and replaced with larger colony cages or barn and free range systems.
The minimum space for each hen will increase from 550 to 750 square centimetres and for the first time it sets out how many free range hens can be in an outdoor area.
But SPCA chief executive Robyn Kippenberger says consumers want free range, and a bigger cage isn't good enough.
"It's still a cage, and when you think that in the EU countries caged bird eggs are not sold now, we're flying in the face of international trends."
Ms Kippenberger says colony cages are extremely expensive and is urging farmers not to consider them.
The Green Party says the larger colony cages do not meet the fundamental purpose of the Animal Welfare Act.
Spokesperson Mojo Mathers said the code entrenches the use of loopholes to allow factory farms to continue to keep animals in cruel conditions.
Step in right direction - FRENZ
The director of New Zealand's oldest free range egg company says the new welfare code for layer hens will stop farmers from taking advantage of the free range brand.
Rob Darby, of FRENZ, says standards are essential to ensure consumers know what they are buying.
Mr Darby says farmers have taken advantage of the lack of rules and labelled mostly barn-laid eggs as free range.
The code is a step in the right direction, but more should be done to support free range farmers, he believes.
