Suit alleges Costco, Trader Joe's and others hiked egg prices during pandemic

FILE-- Costco, Trader Joe’s and Whole Foods are among a list of grocery chains that were hit with a lawsuit alleging that the companies hiked up egg prices amid the coronavirus pandemic. FILE-- Costco, Trader Joe’s and Whole Foods are among a list of grocery chains that were hit with a lawsuit alleging that the companies hiked up egg prices amid the coronavirus pandemic. Photo: Kiyoshi Hijiki/Getty Images Photo: Kiyoshi Hijiki/Getty Images Image 1 of / 20 Caption Close Suit alleges Costco, Trader Joe's and others hiked egg prices during pandemic 1 / 20 Back to Gallery

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Costco, Trader Joe’s and Whole Foods are among a list of over two dozen grocery chains and egg producers hit with a class action lawsuit alleging the companies hiked egg prices amid the coronavirus pandemic.

The suit filed Monday in federal court on behalf of California consumers claims eggs prices have not only tripled at these stores but that prices have stayed 10% higher than they were prior to March 4, when Governor Gavin Newsom declared a state of emergency.

“Because the price of eggs have risen more than 180% during the COVID-19 emergency, it is clear that some or all of the defendants have raised their prices to an extent that violates the law,” according to the suit obtained by Bloomberg Law.

California penal code 396 says it is unlawful for any person, contractor or business to sell food for a price higher than 10% immediately prior to the declaration of a state of emergency. An exception applies only if the seller can prove that the price increase was linked to additional costs imposed by the supplier, cost of labor or materials used to provide the service.

The suit also alleges violations of California’s Unfair Competition Law.

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The plaintiffs argue that while they can’t confirm every company engaged in price-gouging, they believe there was a “set of actors seeking to unfairly profit from the increased consumer demand for eggs in the midst of the ongoing crisis.”

According to legal news site law360.com, Costco denied price gouging, arguing egg producers themselves were raising their wholesale prices which "did not seem in line with feed and production costs of those suppliers." Kenya Friend-Daniel, PR Director for Trader Joe's, confirmed that the grocery chain has not risen the price of eggs during the specified timeframe.

A separate lawsuit filed Thursday by Republican Attorney General Ken Paxton alleges that Cal-Maine Foods, also listed as one of the defendants in the California suit, raised generic egg prices by 300% even though the pandemic hasn't disrupted its supply chain, according to a report from the Associated Press. Texas is seeking more than $100,000 in damages.

Cal-Maine’s wholesale egg prices jumped from about $1 per dozen to as high as $3.44, according to Paxton's lawsuit. That created a huge profit potential for a company controlling nearly 20% of the nation's egg sales, the suit alleges.

Other companies listed in the lawsuit filed in the U.S. District Court for the Northern District of California include Amazon, Albertson’s Companies, Walmart, and other companies outside the state.

The Associated Press contributed to this report.

Editors note: This story has been updated to include a response from Trader Joe's.

Susana Guerrero is an SFGATE digital reporter. Email: Susana.Guerrero@sfgate.com | Twitter: @SusyGuerrero3

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