A US jury has ordered various egg producers to pay $17.7 million in damages to a number of food giants after being found guilty in a long-running overcharging lawsuit.
The egg producers include “the US’s largest” Cal-Maine Foods, and other giants including Rose Acre Farms, United Egg Producers and United States Egg Marketers.
Kraft Heinz, Kellogg, General Mills and Nestlé filed the suit in Illinois federal court in 2011, arguing that between 1999 and 2008, the egg producers ““unlawfully agreed to and did engage in a conspiracy to control supply and artificially maintain and increase the price of eggs”.
Jurors found that the egg suppliers had exported eggs to cut supply in the US market, as well as limiting the number of hens, reducing flocks and killing chickens earlier than they usually did. This kept prices high and is said to have cost the food companies tens of millions of dollars.
The jury ruled all four defendants will share responsibility for the damages, with Kraft Heinz receiving $12.83 million, Kellogg $3.22 million, General Mills $910,000 and Nestlé $810,000. The total could be tripled to more than $53 million under US antitrust law.
In a widely shared statement, Brandon Fox, an attorney representing the food manufacturers, said: “We are extremely grateful for the jury’s service and findings. This was an important case for many reasons, and the jury’s award recognises its significance. 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.”
Despite the guilty verdict, Mississippi-based Cal Maine Foods denies any wrongdoing. In a statement the company commented: “Cal-Maine Foods respects the jury’s decision and appreciates that the damages awarded by the jury are relatively modest compared to the damages sought but remains disappointed with the verdict as Cal-Maine Foods continues to believe that the company did nothing wrong. The two earlier trials based on substantially the same facts and legal arguments resulted in findings of no conspiracy and/or damages.”
It continued: “Because Cal-Maine Foods believes that the plaintiffs’ claims fail as a matter of law, Cal-Maine Foods has petitioned the court to enter a judgment in its favour, known as a directed verdict, notwithstanding the jury’s decision”.
“Significantly, the jury found that the United Egg Producers certified program itself does not constitute a restraint of trade. Also, because the egg producers in this case only represent 15.5 percent of the market, Cal-Maine Foods believes the law is clear that the defendants in issue did not have sufficient market power to restrain trade. Cal-Maine Foods looks forward to the court’s consideration of these arguments and will continue to evaluate its options, including, if necessary, an appeal.”
In a statement provided to food social networking service Allrecipes, Rose Acre Farms said: “Rose Acre Farms is disappointed – and strongly disagrees – with the jury’s verdict and damages award, which contradicts the jury decisions in the two previous trials (with other plaintiffs) on these same issues, which resulted in defence victories.
“Rose Acre has and continues to steadfastly deny being part of any anticompetitive egg price-fixing conspiracy, and we will continue to explore and consider all legal options, including post-trial relief and appeal.”
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