The Kraft logo is pictured in front of its headquarters in Northfield, Illinois, March 25, 2015. Kraft Foods Group Inc, maker of Velveeta cheese and Oscar Mayer meats, will merge with ketchup maker HJ Heinz Co, owned by 3G Capital and Berkshire Hathaway Inc., to create the world’s fifth-largest food and beverage company . … Acquire license rights Read more
Nov 22 (Portal) – Kraft (KHC.O), General Mills (GIS.N) and other major food companies have convinced a federal jury in Chicago that leading U.S. egg producers were responsible for illegal price increases, paving the way for a second procedure to determine damages.
Tuesday’s ruling followed more than five weeks of antitrust litigation against a group of egg producers, including Cal-Maine Foods (CALM.O), the country’s largest egg producer and distributor, and Rose Acre, the second-largest, over claims they had the market “manipulated” by conspiring to charge artificially high prices.
Cal-Maine said in a statement Wednesday it was disappointed with the jury’s verdict on liability. It said the jury had rejected “significant portions” of the plaintiffs’ claims and would “vigorously contest” the food manufacturers’ damages claim in court.
Attorneys for other defendants did not immediately respond to requests for comment.
Trade associations United Egg Producers and United States Egg Marketers were also found liable. The defendants all denied any wrongdoing.
Kraft and the other plaintiffs, including Kellogg (KN) and Nestle (NESN.S), will argue damages before the same jury next week in a two-day second phase of the trial that begins Nov. 28.
The food manufacturer plaintiffs have not proposed a specific amount of damages, a spokesman for their law firm Jenner & Block said on Tuesday.
Jenner attorney Brandon Fox said in court that the plaintiffs spent “hundreds of millions of dollars” on egg products. He said Kellogg purchased tens of millions of dollars’ worth of egg products from Rose Acre.
Fox said in a statement that the plaintiffs were “incredibly pleased” with the jury’s decision to hold the defendants accountable.
Kraft and the other plaintiffs alleged that Cal-Maine and the other defendants conspired to limit the supply of eggs in order to drive up prices.
“The conspiracy actually existed. You know the players. You know who did it. They had the opportunity to see it day after day,” Fox told jurors at trial.
The defendants countered that consumer demand and independent corporate interests influenced business decisions.
“The toll this case has taken has been immeasurable,” James King of Porter, Wright, Morris & Arthur, an attorney for the family business Rose Acre, told jurors.
The plaintiffs expect the damages process to take about two days. U.S. District Judge Steven Seeger is overseeing the case.
The case is Kraft Foods Global Inc v. United Egg Producers Inc, U.S. District Court for the Northern District of Illinois, No. 11-cv-8808.
For plaintiff: Brandon Fox of Jenner & Block
For United Egg Producers and United States Egg Marketers: Robin Sumner of Troutman Pepper Hamilton Sanders
For Cal-Maine: Patrick Collins of King & Spalding
For Rose Acre: James King of Porter, Wright, Morris & Arthur
Reporting by Mike Scarcella
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