Egg Price-Fixing Conspiracy: Unraveling the Layers of Antitrust Litigation

November 22, 2023

An Illinois federal judge recently held that several food companies met their burden of showing that a group of egg farmers conspired to inflate egg prices. In 2011, a legal battle unfolded as major food industry giants – Kraft, Kellogg, General Mills, and Nestle – launched a lawsuit accusing prominent egg producers and trade groups of artificially restricting their supply to inflate prices between 1999 and 2008. The defendants included Cal-Maine Foods, Rose Acre Farms, United Egg Producers, and United States Egg Marketers.

The intricate web of the alleged conspiracy involved adopting animal welfare measures that restricted hen and egg supply, increasing egg exports, and implementing short-term measures to control and maintain supply artificially. The food companies claimed that the egg producers, including Cal-Maine Foods and Rose Acre Farms, engaged in a price-fixing scheme, manipulating the market dynamics to boost prices.

The legal battle saw two liability trials, both ending in favor of the defense. The first jury acknowledged the existence of a price-fixing conspiracy but deemed it to have minimal impact on prices. The second jury concluded that no conspiracy existed at all.

However, when Judge Seeger, conducting his own analysis, aligned with Judge Pratter’s conclusion that a preponderance of evidence established the existence of a conspiracy. The judges contended that the egg producers, through trade associations like United Egg Producers, communicated and actively participated in implementing supply-reducing initiatives.

Judge Seeger highlighted that the conspiracy went beyond mere communication, with egg producer co-conspirators actively placing executives in key roles on United Egg Producers (“UEP”) and United States Egg Marketers boards and committees. These executives played pivotal roles in developing and approving initiatives aimed at reducing the egg supply. As UEP sounded the alarm within the industry, warning of substantial losses and urging supply management, the alleged co-conspirators adopted these measures in near unison.

The case exposed not only the complexity of proving a conspiracy but also the industry’s vulnerability to market manipulation. The defendants, accused of orchestrating a systematic effort to control egg prices, faced a legal battleground where conflicting jury decisions added layers of uncertainty.

The egg industry faced heightened scrutiny as legal proceedings unfolded, revealing collaborative efforts that extended beyond standard market practices. The case serves as a stark reminder of the complexities involved in uncovering conspiracies within intricate industries and navigating the legal nuances surrounding antitrust allegations. The case is Kraft Foods Global Inc. et al. v. United Egg Producers Inc. et al., case number 1:11-cv-08808, in the U.S. District Court for the Northern District of Illinois.

For more information on what an antitrust lawsuit could mean for Illinois business, contact the qualified attorneys at Rock, Fusco & Connelly.