Kraft, Kellogg, others win $18M victory in egg price-fixing verdict

Update:

• A federal jury in Illinois awarded Kraft, Kellogg, Nestle and General Mills nearly $18 million in damages as the result of a price-fixing scheme coordinated by the largest egg producers in the United States and two industry groups. 
• The jury determined the food companies proved they were entitled to damages from the price-fixing scheme, which inflated prices via coordinated supply restrictions.
• Kraft, Kellogg, Nestle and General Mills had argued they were entitled to more than $25 million in damages as compensation for being overcharged from October 2004 to December 2008.
• The egg producers include Cal-Maine Foods and Rose Acre Farms, industry groups United Egg Producers and United States Egg Marketers, and two nonparty co-conspirators. 

Egg price-fixing overview: 

• Who: Kraft, Kellogg, General Mills and Nestle claim that egg producers Cal-Maine Foods and Rose Acre Farms are involved in an anti-competitive price fixing conspiracy along with the United Egg Producers and United States Egg Marketers, according to Law360. 
• Why: The companies are accusing the egg producers of instituting industry wide supply restrictions while blaming animal welfare improvements, the website reported.
• Where: The egg price-fixing case is being heard in federal court in Illinois.

(Nov. 27, 2023)

Kraft, Kellogg, General Mills and Nestle are accusing egg producers Cal-Maine Foods and Rose Acre Farms of being involved in an anti-competitive price fixing conspiracy along with the United Egg Producers and United States Egg Marketers, according to Law360.

Attorneys for the companies showed a federal jury in Illinois emails, internal records and other documents showing how the two companies used the two industry groups as the go-between in order to run a price-fixing scheme, the website reported.

Lawyers argued the scheme involved slaughtering hens, a coordinated egg export program, an egg certification program to increase space for hens and a ban on filling the cages of hens who die with new hens, Law360 reports.

Any of the producers can choose to make those decisions independently, the attorneys argued, according to Law360.

“What they weren’t free to do is to come together and do it collectively” in the name of economic benefit, the attorney argued during the first five days of the trial, Law360 reports.

Price issues in 1999 led industry group to push for lower egg production, documents show

Kraft and others are looking for damages of more than $395 million based on their expert report, Law360 reports.

The group is arguing that the egg producers worked together to restrict the supply of eggs and thus artificially inflate the prices between at least 1999 and 2008, Law360 reports.

The price fixing accusations come after a time frame when prices hit an abysmal level, the attorney told the jury, according to Law360.

At that point, United Egg Producers reportedly told the egg producers that the market was oversaturated and that was leading to the industry’s pricing issues to artificially limiting the supply could be a solution, the plaintiffs’ attorney said documents show, according to Law360.

Post Holdings Inc., the parent company of Michael Foods, agreed to a $75 million settlement in 2017 as part of an egg price-fixing class action lawsuit.

Have you been impacted by the alleged egg price-fixing? Let us know in the comments.

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