Antitrust Price Fixing Alleged In Egg Market

     PHILADELPHIA (CN) – An antitrust class action accuses egg producers of conspiring to fix prices for fresh eggs for eight years. A second antitrust class action in Minneapolis accuses the nation’s largest producer and distributor of processed eggs of conspiring with two other firms to fix prices for their products since 2002.

     The lead defendant in Philadelphia, United Egg Producers, is the largest egg trade organization in the United States, representing 96 percent of domestic egg producers, the complaint states. Its members and some nonmembers conspired to fix prices of “shell eggs” since Jan. 1, 2000, the complaint states.
     The defendants allegedly conspired to fix prices and restrain commerce by “agreeing to reduce the total number of hens at laying farms by increasing cage space, but agreeing not to replace hens lost through the increases; agreeing to manipulate the molting of hens to keep egg production low; agreeing to delay or reduce chick hatching; agreeing to reduce inventory and/or not to expand operations; agreeing to restrain output in the United States; manipulating the export of eggs to reduce supply; and fixing prices through a horizontal agreement to restrain output.”
     Plaintiffs’ lead counsel is Brent Landau with Cohen, Milstein, Hausfeld & Toll.
     In the Minneapolis class action, three leading makers and distributors of processed eggs are accused of conspiring to fix prices since Jan. 1, 2002.
     One of the three, Michael Foods, controls 45% of the U.S. market and reported $1.6 billion in sales worldwide in 2007, according to the complaint.
     Also sued are Golden Oval Eggs, which reported $165.2 million sales this year through May, according to the complaint; and MoArk, which Land O’ Lakes acquired in 2006 and which has sold its liquid egg processing assets to Golden Oval.
     These three defendants also are named as defendants in the Philadelphia case.
     Liquid and processed eggs are used in the food industry because they are easier to deal with than fresh eggs.
     Lead plaintiff ZaZa says it bought processed eggs from the defendants. ZaZa says the U.S. Justice Department is conducting a criminal investigation of price fixing in processed eggs. In SEC filings, all three defendants acknowledged receiving subpoenas in the federal investigation, the complaint states.
     ZaZa seeks an injunction and treble damages. It is represented by W. Joseph Bruckner with Lockridge, Grindal, Nauen.

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