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New York state files lawsuit against major egg producer for price gouging during COVID-19

The company allegedly marked up prices to over four times the normal cost

Photo (c) simpson33 - Getty Images
Pricing products based on inventory is not new, but the New York State Attorney General is taking action against egg producers who have gotten a bit too enthusiastic with their markup during the pandemic by charging consumers far above normal prices.

New York Attorney General Letitia James has filed a lawsuit against Hillandale Farms, accusing the company of illegally marking up the price of its products during the coronavirus pandemic. Hillandale is one of the country’s largest producers and wholesale distributors of eggs. 

Quadrupling egg prices 

According to the lawsuit, James claims Hillandale quadrupled the price consumers typically pay for eggs on over four million cartons of its product. Overpriced eggs were sold to major grocery store chains, U.S. military facilities, and wholesale food distributors throughout New York during March and April.

During that two-month stretch when the coronavirus was raging through New York, James estimates that Hillandale made an estimated $4 million from “unlawfully increasing” the price of these eggs. To make matters worse, many of those eggs were sold in grocery stores located in low-income areas. 

“As this pandemic ravaged our country, Hillandale exploited hardworking New Yorkers to line its own pockets,” said Attorney General James. “In less than two months, Hillandale made millions by cheating our most vulnerable communities and our service members, actions that are both unlawful and truly rotten. I will always stand up for working people, especially when they are taken advantage of by corporate greed.”

Examples of the price gouging

To illustrate her point, James said that Hillandale charged Western Beef supermarkets $0.59 to $1.10 for a dozen large white eggs in January 2020. Then, on March 15, Hillandale jacked that price up another 39 cents. When the pandemic started to hit full stride, Hillandale raised the prices it charged Western Beef over and over, eventually asking $2.93 per dozen — a price almost five times the price Hillandale charged in January. 

Hillandale allegedly pulled the same trick on eggs sold to the commissary store at West Point, James said. In April, Hillandale charged West Point $3.15 per carton of large eggs, almost quadrupling the $0.84 price it charged three months earlier. The suit alleges that Hillandale repeated that same price scheme on eggs sold to Stop & Shop, BJ’s Wholesale Club, Associated Supermarkets, and commissary stores at U.S. military bases at Fort Hamilton and Fort Drum. 

Did consumers across the U.S. get hit with the same?

Is what James found in New York something that happened across the country? In ConsumerAffairs’ research, there was indeed a heightened demand for eggs during the early days of COVID-19 and a price jump, but not necessarily the same as New York.

In checking USDA data, the outbreak caused “large portions” of American consumers to stockpile eggs because the versatility of eggs is high when it comes to home cooking.

That, in concert with the typical Easter season demand, led to sharp price increases, the USDA said. Compared to February, the price for a dozen Large Grade A eggs in the New York wholesale market skyrocketed 77 percent to $1.94 a dozen. In comparison, the National Index Price rose 154 percent to $1.56 per dozen. The Central States Breaking Stock price rose 110 percent to 64 cents per dozen.

Egg prices today and the coming months

By and large, egg prices have come back to normal levels. There are some regional upticks like 3 cents higher for Jumbo eggs in California. Still, that’s nothing compared to the prices that James cites in her suit against Hillandale. 

Supplies of eggs are generally moderate, and the retail demand has backed off now that consumers are comfortable with the ins and outs of the pandemic. Two factors to consider in the coming months when it comes to egg prices are students returning to school and an uptick in egg buying as we approach the holiday season.

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