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Texas Attorney General accuses nation’s largest egg supplier of price gouging

Cal-Maine Foods accused of raising prices by around 300 percent

Eggs
Eggs (michael lorenzo/SXC)

Texas Attorney General Ken Paxton filed a lawsuit against the nation’s largest shell egg producer, accusing the corporation of price gouging.

Paxton accused Cal-Maine Foods, Inc. of raising prices by roughly 300%, even though he claims the company “has not experienced any supply issues or other disruptions that are driving it to charge more for eggs,” according to the lawsuit.

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The company sells its eggs to both large retailers and mom-and-pop shops. Cal-Maine’s generic eggs typically run a distributor about $1 a dozen, but since the coronavirus pandemic, prices have eclipsed at $3 a dozen, Paxton claims.

“It is simply charging more because it can, or, more specifically, because the pandemic caused market demand to jump,” Paxton’s office claims in the lawsuit.

Cal-Maine spokesperson Jeff Eller released a statement to KCBD denying the allegations and said they have “no control” over the pricing market.

“We are steadfast in our belief these charges are grossly unfair and without merit. The domestic egg market is intensely competitive and highly volatile. For decades, we have priced most of our sales off an independent, third-party market quote published by Urner Barry Publications, Inc. We have no control over this market quote and it fluctuates wildly from week to week and sometimes day to day. We have been consistent in our pricing practices whether we sell at a profit or at a loss. We will vigorously defend ourselves from this government overreach into agriculture, and look forward to speaking more in the future,” Eller wrote in the statement.

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The Attorney General’s Office is seeking at least $10,000 per violation in fines to be paid to the state and refunds to the shops that purchased the eggs, according to the lawsuit.

“No one is exempt from price gouging laws in Texas, including suppliers of grocery stores and pharmacies,” said Attorney General Paxton. “My office will not tolerate any person or business taking advantage of hardworking Texans. Those who violate the Texas Deceptive Trade Practices Act will be met with the full force of the law.”

Cal-Maine, based in Jackson, Mississippi, holds a 19% overall market share, making it the largest producer and marketer of shell eggs in the United States and roughly twice the size of the country’s second larger producer, according to the lawsuit. As of 2015, it operated over 90% of the largest processing facilities in Texas.


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