Land O'Lakes in $25 mln egg price-fixing accord

Tue Jun 8, 2010 3:01pm EDT

Related Topics

* Land O'Lakes unit to pay $25 million

* Alleged conspiracy to drive up egg prices

* Several defendants remain in case

NEW YORK, June 8 (Reuters) - Land O'Lakes Inc has agreed to pay $25 million to settle a class-action lawsuit accusing it of conspiring with farmers to fix egg prices.

The lawsuit accused several major egg producers of violating the Sherman Antitrust Act by conspiring with several trade associations to reduce egg output and thus drive prices of shell eggs and egg products higher.

According to the proposed settlement, filed Friday with the federal court in Philadelphia, Land O'Lakes unit Moark LLC will pay the $25 million, a sum equal to nearly 28 percent of profit in its egg division over the last six years. The accord also settles claims against Norco Ranch Inc, a unit of Moark.

The settlement covers all people and businesses who bought shell eggs and egg products since 2000, court records show. Land O'Lakes bought Moark in 2005.

A Land O'Lakes spokeswoman said the settlement avoids the cost and distraction of protracted litigation.

In 2009, the Arden Hills, Minnesota-based cooperative posted a profit of $209.1 million on net sales of $10.41 billion, according to its annual report.

The settlement requires court approval. Several defendants remain in the 18-month-old case, including Cal Maine Foods Inc (CALM.O), Michael Foods Inc and Rose Acre Farms Inc.

According to the United Egg Producers Inc, one of the defendants, the United States produces about 80 billion eggs a year, based on March production data. Per capita U.S. consumption is 246 eggs a year, the trade group said.

The case is In re: Processed Egg Products Antitrust Litigation, U.S. District Court, Eastern District of Pennsylvania, No. 08-md-02002. (Reporting by Jonathan Stempel; Additional reporting by Bob Burgdorfer in Chicago; editing by John Wallace)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.