A long-running price-fixing lawsuit brought by major food manufacturers against US egg producers and trade groups has been settled in favour of the plaintiffs.
Cal-Maine Foods, the country’s biggest egg producer, Rose Acre Farms, the second largest, and trade groups United Egg Producers and United States Egg Marketers were sued back in 2011 by Kraft Foods, Kellogg, General Mills and Nestlé.
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They alleged the egg producers engaged in a conspiracy to reduce supply in an attempt to increase the price of eggs. Yesterday (21 November), a jury sitting in the US District Court for the Northern District of Illinois agreed with them, finding the food companies were injured by the conspiracy from October 2004 to December 2008.
It said the conspiracy existed and was perpetuated through actions such as reducing the nation’s hen population and boosting exports to limit the US egg supply.
However, the jury found the food companies were not injured between 2009 to 2012, as they alleged.
The defendants will have to pay damages to the food companies. The amount of damages will be decided in a trial scheduled to begin on 20 November.
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By GlobalDataCal-Maine said it “will vigorously contest [the] plaintiffs’ presentation of purported damages and will continue to assess the decision and options for appeal”.
In a statement after the verdict in the case – Kraft Foods Global, Inc. et al. v. United Egg Producers, Inc. et al. – was handed down, Cal-Maine said: “While we are disappointed with the overall decision, we prevailed on a number of issues that we believe are important and should ultimately define this case.
“The plaintiffs alleged a conspiracy running from 1998-2008 with damages extending through 2012. The court and jury determined that any alleged damages would be limited to the period 2004-2008. The jury also rejected other key portions of the plaintiffs’ case that we believe should limit the plaintiffs’ damages request further.”
Rose Acre Farms told Just Food it cannot comment until the complete trial has concluded.
Just Food has also asked United Egg Producers and United States Egg Marketers for their response to the verdict.
Kraft Heinz has also been asked for its comments.
In January, an organisation representing the US farming industry called on the country’s anti-trust regulator to investigate high egg prices.
Farm Action asked the Federal Trade Commission (FTC) to look for signs that egg producers were conspiring to keep prices artificially high.
