Originally published September 17 2014
Egg industry trade group illegally fixed prices by artificially restricting supply, lawsuit alleges
by L.J. Devon, Staff Writer
(NaturalNews) That certification stamp on egg cartons is supposed to be a sign of quality, but according to a new lawsuit, an egg industry trade group called United Egg Producers, was using the stamp of certification as a manipulative tool. UEP coerced egg producers to join as members of their cult and engage in price-fixing in order to receive the certification stamp. If egg producers didn't follow along, then supermarkets were less likely to accept the uncertified, unstamped egg cartons.
The lawsuit, filed by Indianapolis-based Marsh Supermarkets, accuses UEP of violating the Sherman Antitrust Act, unveiling a 20-year conspiracy of price-fixing that took from supermarkets and consumers. The lawsuit alleges that the egg industry trade group colluded with its member companies to reduce egg supply in the marketplace. Their elaborate price-fixing conspiracy included reducing the number of laying hens, prematurely molting the hens to restrict their output and delaying hatching. If UEP member companies didn't agree to the supply-reducing tactics, then they were practically shunned and not given their certification.
Egg producers were practically being forced to restrict hen and egg production to keep prices high, to ultimately pad the conspirators' pocketbooks.
Conspiracy to restrict egg supply begins in 1994The lawsuit alleges that United Egg Producers initiated the price-fixing maneuvers in 1994, under the direction of research economist Don Bell. Within four years, Don Bell saw the opportunity and expanded the UEP's membership structure, engulfing both corporate members and independent egg producers to make sure that small farms never reduced egg prices by increasing egg supply.
According to the lawsuit, the large group of UEP members officially colluded in 1999 to restrict egg supply. According to Courthouse News, the three-step process included a "5 percent molt of the flock, a 5 percent reduction in flock inventory, and a program to limit the number of new hens hatched."
Price-fixing caused a 40 percent increase in US wholesale egg pricesIf an egg company disagreed with the price-fixing maneuvers and became a whistleblower, then United Egg Producers would contact the dissenting company's major supermarket customers and convince them that their eggs are unapproved and not certified. For instance, when egg producer Sparboe tried to leave the UEP cult, the UEP "contacted Sparboe's customer, Wal-Mart, in an attempt to discourage the company from purchasing eggs from Sparboe." Left unaccountable and unquestioned, UEP was emboldened to continue their manipulative conspiracy against supermarkets and consumers. The deceptive strategy worked for many years. In 2008, UEP had successfully caused a 40 percent increase in US wholesale egg prices. Between 2002 and 2008, it's likely that US customers were paying an extra $2 for every $5 worth eggs. Now apply this to millions of US customers, and it's easy to see how the UEP and its cult were fraudulently raking in millions of dollars. When Marsh Supermarkets began asking questions, the conspiracy began to unravel.
With a total output of 75 billion eggs produced each year, the US supplies nearly 10 percent of the world's egg supply. The UEP's price-fixing greed is basically restricting the potential of America to feed many more people in the US and around the world. Since a laying hen can produce up to 300 eggs a year, the UEP's decision to restrict their production has caused not only higher prices but fewer meals for hungry people around the world.
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