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Major Food Companies Take Legal Action Over Alleged Egg Price Manipulation

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Leading food manufacturers, including Kraft and Kellogg, have secured a pivotal federal court decision allowing them to present crucial export data in an upcoming antitrust trial. They are seeking over $110 million in damages, alleging that egg producers manipulated prices.

US District Judge Steven Seeger, based in Chicago, has given the green light for plaintiffs like Kraft, General Mills, and Nestle to present their case. They assert that the United Egg Producers and other entities conspired to export eggs, reducing the domestic supply in the US, leading to inflated prices.

Judge Seeger mentioned, “The evidence aligns with the plaintiffs’ primary argument of a single conspiracy to hinder trade. It’s up to the jury to determine the truth.”

The egg producers had attempted to exclude any mention of egg exports during the trial, which is slated to commence on October 17. Other parties involved in the defense include United States Egg Marketers, Cal-Maine Foods, and Rose Acre Farms.

The defense team for the egg companies countered that the plaintiffs couldn’t conclusively show that egg exports led to higher prices domestically. All defendants have refuted any misconduct.

As of Tuesday, neither the representatives from United Egg Producers and other defending parties nor the spokespeople for Kraft, Kellogg, General Mills, and Nestle have issued any comments.

This case, overseen by Judge Seeger, was initially part of a larger litigation bundle that underwent pretrial procedures in Philadelphia’s federal court. It was later moved back to the Northern District of Illinois in 2019.

The plaintiffs highlight periods between 2002 and 2008, alleging that eggs were exported from the US to intentionally restrict supply and escalate prices. They further claim that this was part of a wider strategy to hike prices in the US, which also involved agreements to decrease the hen population.

This upcoming trial marks the third of its kind. In 2018, a jury sided with Rose Acre and two other producers in a case initiated by direct purchasers. This decision was later confirmed by the 3rd US Circuit Court of Appeals. In 2019, another set of plaintiffs, including supermarkets, faced defeat in court.

The trial is anticipated to span approximately five weeks.

Case Reference: Kraft Foods Global Inc vs. United Egg Producers Inc, US District Court for the Northern District of Illinois, No. 11-cv-8808.

Legal Representatives:

  • For the plaintiffs: Brandon Fox of Jenner & Block
  • For United Egg Producers and United States Egg Marketers: Robin Sumner and Robert Browne Jr of Troutman Pepper Hamilton Sanders.

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