An Illinois federal jury found that leading egg producers and leading trade groups illegally manipulated the market to boost the price of eggs.
Cal-Maine Foods Inc. and Rose Acre Farms Inc., along with two trade groups, conspired to limit the supply of eggs, causing major food companies, including General Mills Inc., Kraft Heinz Co., Kellogg Co., and Nestle SA, to likely overpay for eggs for several years.
The jury, consisting of nine men and three women from the US District Court for the Northern District of Illinois, ruled in favor of the food companies, stating that the egg producers and trade groups must pay damages.
The trial, which is set to determine the amount of damages, is scheduled to begin on November 29 and is expected to last two days. According to the law, whatever damages awarded should be tripled, although the jury will not be informed of this statutory requirement.
The jury determined that the conspiracy, aimed at increasing egg prices, occurred from October 2004 to December 2008. The practices involved reducing the nation’s hen population and increasing egg exports to limit the US egg supply, thereby violating federal antitrust laws by unreasonably restraining trade in the egg market.
While it took so long for this groundbreaking verdict, it could set a precedent for other plaintiffs seeking legal action against food producers for anticompetitive practices.
“We are incredibly pleased by the jury’s decision,” said Brandon Fox, a Jenner & Block LLP partner representing the food companies. “For the first time, the defendants have been held liable for their antitrust violations. We are now going to turn our attention to the damages phase.”
While this suit covers actions done from 1999 to 2008, some observers argue that similar actions are influencing more recent prices of eggs. The average cost of a dozen grade A eggs soared 150% from January 2022 to January 2023 when prices peaked at $4.82 a dozen.
The surge was partly blamed on an Avian Flu outbreak which as of January killed over 40 million egg-laying hens, but critics, such as More Perfect Union which made this video, argue that these big egg producers, specifically Cal-Maine Foods, Inc are still at it.
Among other things, More Perfect Union points out that in its December earnings report, the company credited its “record average selling prices for conventional eggs” to the Avian Flu outbreak. They raised prices by 150.5% year-on-year. But then they also said, in the same report, that there were no positive tests for the virus at any of the company’s facilities — in simple terms admitting to profiting from the virus while saying they were not at all affected by it.
Information for this story was found via Bloomberg Law news, St. Louis Fed, More Perfect Union, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.