Texas Attorney General Ken Paxton announced on Thursday in Dallas that Texas food banks will receive more than 2 million eggs after the state finalized a settlement with egg producer Cal-Maine Foods Inc. over alleged price gouging during the COVID-19 pandemic in 2020.
The Texas Attorney General’s Office filed a consumer protection lawsuit against Cal-Maine Foods Inc. in 2020 in a state district court in Harris County, alleging that the company sharply increased egg prices in Texas during the early months of the COVID-19 emergency declaration.
The lawsuit stated that Cal-Maine Foods Inc. raised egg prices by as much as 300 percent in Texas after March 13, 2020, when the governor issued a statewide disaster declaration related to the spread of COVID-19.
The Attorney General’s Office alleged that Cal-Maine Foods Inc. violated the Texas Deceptive Trade Practices-Consumer Protection Act by charging excessive prices for eggs, which the state classified as an essential food item during the public health emergency.
The settlement requires Cal-Maine Foods Inc. to provide more than 2 million eggs for distribution to Texas food banks that operate within the state’s emergency food assistance network.
The Attorney General’s Office reported that investigators reviewed Cal-Maine Foods Inc.’s pricing, sales records, and market conditions in Texas during the early months of the COVID-19 pandemic before entering into the settlement.
Cal-Maine Foods Inc. operates as one of the largest egg producers in the United States and supplies shell eggs to retail grocery chains, foodservice distributors, and other customers in Texas and other states.
The state’s petition alleged that Cal-Maine Foods Inc. used heightened demand and emergency conditions to increase prices for eggs sold to Texas retailers at levels that the Attorney General’s Office described as excessive under state consumer protection standards.
The office stated that the egg deliveries will occur over a defined distribution period, with logistics determined by the capacity of each participating food bank and the shelf life of the product.
The settlement also requires Cal-Maine Foods Inc. to maintain records related to its compliance with the distribution requirements and to provide documentation to the Attorney General’s Office upon request.
The Attorney General’s Office stated that it continues to monitor pricing practices for essential goods in Texas and that it may bring additional enforcement actions if investigators identify conduct that appears to violate the Texas Deceptive Trade Practices-Consumer Protection Act during disaster periods.
The settlement between Texas and Cal-Maine Foods Inc. concludes one of the state’s civil enforcement actions related to allegations of price gouging on essential food items during the COVID-19 emergency in 2020.
