Texas attorney general sues egg company for price gouging amid coronavirus

Texas attorney general sues egg company for price gouging amid coronavirus
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Texas Attorney General Ken Paxton on Thursday filed a lawsuit alleging that the nation’s largest egg supplier raised the price of their eggs by roughly 300 percent amid the coronavirus pandemic.

The lawsuit alleges that the egg supplier, Cal-Maine Foods, has hiked the price of eggs from about $1 per dozen to about $3, despite experiencing no disruption to its supply chain. 

“On information and belief, Cal-Maine has not experienced any supply issues or other disruptions that are driving it to charge more for eggs. It is simply charging more because it can, or, more specifically, because the pandemic caused market demand to jump,” the lawsuit reads. 

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“In summary, Cal-Maine is taking advantage of a disaster by offering for sale, and/or selling, eggs at exorbitant or excessive prices after Texas Governor Abbott declared a disaster on March 13, 2020 under Chapter 418 of the Texas Government Code.”

Cal-Maine has a 19 percent overall share of the domestic egg market, according to the lawsuit, making it the largest supplier of eggs in the U.S. 

In a statement to The Hill, Jeff Eller, a spokesman for Cal-Maine Foods, said that the company prices most of its sales off of an independent, third-party market quote and that those quotes change rapidly. 

“We are steadfast in our belief these charges are grossly unfair and without merit,” Eller said. “The domestic egg market is intensely competitive and highly volatile.”

As the coronavirus began spreading rapidly in the U.S. in March and forced the closure of restaurants, shoppers flocked to grocery stores to stock up on household necessities. Eggs were among the products in high demand and prices rose significantly through March and into April. 

But the Texas attorney general’s lawsuit alleges that Cal-Maine’s prices in the state “have exceeded the national trend.”

“As recently as April 9, 2020, Cal-Maine delivered a batch of generic eggs to a Texas mom-and-pop business, charging $3.32 for a dozen generic jumbo eggs, and $3.44 for a dozen generic large brown eggs,” the lawsuit alleges. 

Eller, the spokesman for Cal-Maine, said that the company had been “consistent” in the way it prices eggs, denying allegations that it took advantage of the coronavirus crisis.

“We have been consistent in our pricing practices whether we sell at a profit or at a loss,” he said. “We will vigorously defend ourselves from this government overreach into agriculture, and look forward to speaking more in the future.”