A Major Egg Producer Has Been Accused Of Price Gouging

We've written about pork industry price-fixing, canned tuna industry price-fixing, and now we get to add yet another protein to our list of cost-manipulated foods: the common chicken egg. According to a tweet from the New York Attorney General's office, Hillandale Farms—one of the largest egg producers in America—is being sued for pandemic-related price gouging.

In the wake of the announcement The New York Times wrote that "Between January and early March, Hillandale sold eggs to Western Beef at prices ranging from 59 cents to $1.10 a dozen. Then on March 15, two days after President Trump declared a national emergency in response to the coronavirus, the lawsuit says Hillandale increased its price to $1.49." By the end of March those wholesale prices had risen to an astronomical $2.93 a dozen. Similar price increases were also observed at other stores Hillandale Farms supplied, such as Stop & Shop, where wholesale prices as low as 85 cents a dozen rose to $3.15. And, importantly, the New York Attorney General's lawsuit alleges that the price increases were not due to the company trying to offset increased costs—it was just about profit.

While Hillandale Farms has issued a statement saying that there have not been any changes in how they price their eggs, the NY AG's law suit notes that Hillandale worked with a market research group, Urner Barry, to create a "feedback loop" to justify their price increases. As written by the Times:

"The authorities say the feedback loop worked like this: Hillandale and other egg producers told Urner Barry their assessment of egg prices; Urner Barry used these assessments to create "indexed" prices that it sent to the producers; finally, the egg producers sold eggs at the price set by Urner Barry, citing the index as their method for setting a "fair" price."

While price gouging is in general a manipulative, harmful practice, this instance seems particularly egregious as it targeted a staple food that forms an important part of the diet of low-income families. In fact, according to the New York Attorney General's office, the eggs were often sold at grocery stores in low-income communities.