‘Grossly Inflated’: Consumers Allege Major Grocers, Producers, Wholesalers Gouged Egg Prices During COVID-19 Pandemic

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Ten consumers allege in a proposed class action lawsuit that nearly 30 grocers, producers and wholesalers—including Walmart, Trader Joe’s, Amazon, Kroger, Whole Foods and Costco—have illegally marked up prices for eggs to nearly triple their regular cost during the novel coronavirus pandemic. 

According to the 12-page lawsuit, the defendants are among a set of actors who “seek to profit from the misery of millions” through near-rampant price gouging while the pandemic rages on. The plaintiffs allege that the below defendants have sought to unfairly profit from the spiked consumer demand for eggs while much of the country remains subject to governmental stay-at-home orders and voluntary quarantine:

• Cal-Main Foods, Inc.;
• Rose Acre Farms, Inc.
• Michael Foods, Inc.;
• Hillandale Farms;
• Trillium Farm Holdings, LLC;
• Rembrandt Enterprises, Inc.;
• Hickman’s Egg Ranch, Inc.;
• Daybreak Foods, Inc.;
• Weaver Bros, Inc.;
• Prairie Star Farms, LLC;
• Sparboe Foods Corp.;
• Herbuck’s Poultry Ranch, Inc.
• Wabash Valley Produce, Inc.;
• Centrum Valley Farms, L.P.;
• Opal Foods, LLC;
• Whole Foods Market Group, Inc.;
• Costco Wholesale Corp.;
• Raley’s;
• Stater Bros. Holdings, Inc.;
• Wal-Mart Stores, Inc.;
• Amazon.com, Inc.;
• Save Mart Supermarkets;
• Albertson’s Companies, Inc.;
• Trader Joe’s Co.;
• The Kroger Co.; and
• Winco Holdings, Inc.

The suit notes early on that while the plaintiffs “cannot assert that every defendant engaged in price-gouging” due to the “secretive process of price-setting,” they “can and do assert that some or all of these defendants illegally marked up egg prices” after California Governor Gavin Newsom declared a state of emergency on March 4, 2020. 

Egg prices have remained “much more than ten percent higher” than they were prior to California’s state of emergency, the complaint claims. Under California law, it is unlawful for any person to increase the price of a product more than 10 percent during a state of emergency or local emergency, according to the suit. Governor Newsom specifically invoked this protection, among others, in declaring a state of emergency in California, the plaintiffs say.

Though the specific protection—Section 396 of the California Penal Code—offers a safe harbor for sellers who price their products at no more than 10 percent above their own costs, plus the markup usually charged prior to a state of emergency, the fact that egg prices have jumped “more than 80%” during the COVID-19 pandemic makes clear that “some or all of the defendants” have illegally raised prices, the lawsuit alleges.

The case looks to cover all consumers who bought eggs in California that were sold, distributed, produced or handled by any of the above-listed defendants during the state of emergency declared on March 4.

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