US lawsuits implicate major retails in egg “price gouging”

Producers, wholesalers and major retailers face legal action for alleged “price gouging” by increasing egg prices during the coronavirus pandemic.
calendar icon 20 May 2020
clock icon 3 minute read

According to reporting in FarmingUK, lawyers based in California have began a class action lawsuit. Major retailers like Walmart, Costco, Amazon, Kroger and Trader Joe’s have been named in court papers. Egg producer Cal-Maine Foods has also been listed as a defendant.

Separately, the state of Texas filed a lawsuit alleging “price gouging” against Cal-Maine specifically. The company has denied the allegations.

In response, Cal-Maine issued a statement saying it, “strongly denies these allegations and will vigorously itself against the lawsuit.

“Cal-Maine has not exploited this tragic national pandemic for gain. Cal-Maine Foods is the largest producer and distributor of fresh shell eggs in the US and sells the majority of its shell eggs in states across the southwestern, southeastern, mid-western and mid-Atlantic regions.

"The company’s 3,490+ employees have worked hard during this crisis to meet increased consumer demand. In doing so, Cal-Maine Foods has not changed its longstanding approach to pricing. Any allegation to the contrary is simply not true.

"There has always been great volatility in the egg pricing market. The COVID-19 pandemic caused a massive disruption in every sector of the economy, including the egg industry.

"Retail demand for eggs reached historically high levels and egg prices increased significantly in line with those demand trends. However, egg prices have since declined quickly to pre-COVID-19 levels."

The class action lawsuit from California claims that the defendants used the COVID-19 crisis to hike up the prices of eggs.

In the complaint, the lawyers say:

"This California class action concerns the despicable and illegal practice of price-gouging of essential groceries, specifically eggs, in the midst of the ongoing and unprecedented pandemic.

"Plaintiffs and the class they seek to represent bought grossly marked-up eggs through the supply chain created by the defendants, which includes producers, wholesalers, and retailers.

"Because consumers such as plaintiffs lack access to information about which of the defendants, or all of them, participated in the price-gouging resulting in a near-tripling of egg prices in the past 30 days, plaintiffs have sued all the defendants in the alternative.

"Plaintiffs cannot assert that every defendant engaged in price-gouging, but plaintiffs can and do assert that some or all of these defendants illegally marked up egg prices following the Governor’s declaration of an emergency in violation of California law."

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