Sodexo has filed suit against the United Egg Producers, the nation's largest egg trade group, and six major egg suppliers, alleging a scheme to inflate egg prices in violation of antitrust laws, reports the Los Angeles Times. The complaint, filed in U.S. District Court in Philadelphia, charges that the producers—Cal-Maine Foods, Hillendale Farms, Michael Foods, National Food Corp. of Washington, Ohio Fresh Eggs and Rose Acre Farms—conspired to limit supply by killing hens under the guise of reducing crowding in the cages where they are kept. The trade group is charged with forcing members to participate in the effort in order to receive its certification stamp.
Sodexo says it purchased more than $250 million in egg product from the defendants over the past eight years under prices that were artificially inflated by the supply restriction practices being alleged. For example, the suit charges that egg prices in 2008 were inflated by as much as 40 percent by the anticompetitive practice.
The defendents say that their actions are permitted under a 1922 law called the Capper-Volstead Act that exempts agricultural cooperatives from antitrust laws.