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By Suzanne Blake
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The state of Texas is getting two million free eggs after a settlement was reached with Cal-Maine Foods.
Cal-Maine, which remains one of the largest egg suppliers in Texas, was accused of price gouging in April 2020. The settlement alleges that the company illegally raised the price of eggs by 300 percent, forcing many customers to pay the higher rates.
Why It Matters
In several states, price gouging is illegal. Companies who engage in this practice are generally seen as raising prices excessively for essential goods and services.
Read More on Business
During a declared emergency, such as the coronavirus pandemic, price gouging can be even more harmful for consumers, who might be without funds or other necessities.
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What To Know
Attorney General Ken Paxton finalized the settlement with Cal-Maine Foods, and more than 2 million eggs will be donated by the company to food banks across Texas.
Paxton sued Cal-Maine in April 2020 in hopes of bringing more accountability to the state’s major supplier of eggs, which are a staple ingredient in many Americans’ diets.
“My office will crack down on any corporation illegally raising prices on Texans,” Paxton said in a statement. “Cal-Maine tried to take advantage of the people of Texas during the COVID-19 pandemic, and this settlement is an important step towards securing justice for the company’s unethical actions. Our efforts to hold Cal-Maine accountable have secured reforms that will help prevent any further illegal price gouging and over two million free eggs that will be distributed by food banks across the state.”
Within the next 120 days, 180,000 dozen large brown or white eggs will be donated as part of the settlement.
That includes at least 30,000 dozen eggs to the North Texas Food Bank and Houston Food Bank. Meanwhile, at least 20,000 dozen eggs will be sent to the Tarrant Area Food Bank, Central Texas Food Bank and San Antonio Food Bank.
Cal-Maine has also been banned from demanding a price or selling eggs during a designated disaster period at any price that would violate the Texas Deceptive Trade Practices Act.
Newsweek reached out to Cal-Maine for comment via email.
“As a native Texan, we did see a massive spike in egg prices recently, that has subsided. Texas, by its sheer size has finalized a major settlement, and Cal-Maine settled mainly due to the fact they don't want to lose access to Texas,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
Egg prices that generally hovered around $2 per dozen shot up to over $5 to $6 rapidly, Thompson said.
What People Are Saying
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “Some places it was even higher calling for the current administration and the conservative majority of Texas to investigate gouging. Now prices have come down, still a tad higher than normal, but with the increased supply coming to many food banks, families will be able to go and get eggs at zero or reduced cost.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “The settlement was the result of an egg supplier found to have raised the prices of eggs illegally by over 300 percent in the early days of the pandemic. While some entities during that period were accused of price gouging, few faced any legal consequences.”
What Happens Next
Some of the lowest-income and most vulnerable Texan residents are likely to benefit from the supply of free eggs courtesy of the settlement, as they are distributed to food banks statewide.
“With this settlement, 180,000 eggs will be distributed to different food banks throughout Texas, and a restriction will be put on future egg sales during designated disaster periods that violate existing laws in the state,” Beene said.
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