You can't make a profit without making fewer eggs.
That, according to Giant Eagle Inc., is the conclusion that U.S. egg producers reached in 1999, when talks began that led to a concerted reduction in hens and corresponding rise in prices. In a federal civil complaint filed last week, the region's dominant grocer charged it had been harmed by an egg cartel that, in the guise of protecting the chickens, hatched a price-fixing plot against consumers.
Giant Eagle's complaint against 21 egg industry firms and organizations, which has yet to be assigned to a U.S. District Court judge, piggybacks on a class action lawsuit in federal court in Philadelphia targeting the industry's big trade group, the United Egg Producers. UEP President Gene Gregory on Monday said the allegations were disproved by the industry's reliance on science in making the decisions that some grocers are targeting in lawsuits.
"We look forward to the day in court when we can argue that, because we know we are innocent of those things," he said.
Giant Eagle's lawsuit, by attorney Bernard Marcus of Downtown law firm Marcus & Shipira, said that an egg economist in the late 1990s recommended measures to lower, and stabilize, egg supply. That would end the cycles that had plagued egg producers as they boosted production to address rising prices, only to create gluts that caused prices to plunge.
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