Cal-Maine Foods said it has reached an agreement to pay US$28m to settle anti-trust claims against the company.
Foodservice firm Sodexo reportedly filed a lawsuit against the US egg producer in January 2001 claiming it conspired to decrease the supply of eggs, causing direct purchasers to pay more than needed for eggs, The Los Angeles Times reported at the time.
Cal-Maine, however, said it believes its conduct has been “at all times been lawful, appropriate and fair to our customers” and agreed to settle in order to avoid a drawn-out legal case.
“The largest retailers and egg buyers in the country, including many of our customers, in fact, were fully aware of, and explicitly supported, the industry-wide animal welfare guidelines challenged in this litigation,” said Cal-Maine CEO Dolph Baker.
“We were able to negotiate a settlement which would eliminate most of our exposure in the anti-trust litigation against the company for an amount that we believe is in the best interest of the shareholders, employees, customers and consumers. It significantly reduces the distraction, expense, exposure and inconvenience of protracted litigation and potentially multiple appeals, and allows us to focus on executing the long-term strategy of our business.”
Cal-Maine said it will record a $28m pre-tax charge in the fourth quarter, or $17m after-tax. The company said it does not expect other provisions associated with the settlement to have a material impact on its results of operations.