One of the largest egg producers in the country has been accused by New York authorities of seizing $ 4 million in illegal revenue from gathering customers at extremely high prices when the state was dealing with rising coronavirus cases.
A lawsuit filed Tuesday by Attorney General Letitia James of New York alleges that the producer, Hillandale Farms, sometimes quadrupled the price of eggs in rising demand money in March and April.
In particular, Hillandale targeted distributors in New York City, as well as military installations in West Point, Fort Hamilton and Fort Drum, according to the lawsuit.
The company is not raising prices to offset rising costs, the lawsuit says, but “simply to line up its own pockets and profit the New Yorkers during a time of crisis.”
Officials in Hillandale were not immediately available for comment. They told the attorney general’s office that the company’s customers, which include supermarket chains, had agreed on its pricing practices.
According to the lawsuit, the attorney general’s office received hundreds of complaints from consumers outraged by the sudden price increase.
“This location serves low-income families who, due to the current pandemic urgency, have most likely lost the little income they have,” one complainant wrote. “Shy!”
The lawsuit is one of several that accuses leading egg producers of illegally taking advantage of increased demand at a time when restaurants closed and many Americans were forced to rely more on home cooking.
In April, the Texas Attorney General accused the nation’s largest egg producer, Cal-Maine Foods, of raising egg prices by 300 percent. Another award-winning lawsuit in California named several major supermarket chains including Whole Foods and Costco.
The New York costume names Hillandale Farms Corporation, which is headquartered in Kent, Ohio, as well as five other companies using the Hillandale name.
Hillandale is often ranked in the top five egg producers in the United States. It sells to several supermarket chains in New York, including Stop & Shop, Western Beef, BJ Wholesale Club and Associated Supermarkets.
Between January and early March, Hillandale sold eggs to western beef at prices ranging from 59 cents to $ 1.10 a dozen. Then on March 15, two days after President Trump declared a national emergency in response to the coronavirus, the lawsuit says Hillandale raised its price to $ 1.49.
The company continued to raise its wholesale prices as the pandemic rose in the wild, to a peak of $ 2.93 a dozen by the end of March. Prices charged to Western Calf did not return to normal levels until early May, according to the lawsuit.
Other stores saw similar increases. At Stop & Shop, the hilarious Hilland price jumped as low as 85 cents a dozen in January to $ 3.15 in early April.
The lawsuit alleges that Hillandale raised prices using a “feedback” system, in which he coordinated with a market research company, Urner Barry, to justify the pricing.
Authorities say the reaction loop worked like this: Hillandale and other egg producers told Urner Barry their assessment of egg prices; Urner Barry used these estimates to create “indexed” prices he sent to manufacturers; finally, egg producers sold eggs at the price set by Urner Barry, citing the index as their method of setting a “fair” price.
Urner Barry has denied the wrongdoing, saying the price increase simply reflects increased demand.
During the period covered by the lawsuit, Hillandale received about $ 8 million in revenue in New York, about $ 4 million from it from price increases, according to the lawsuit.
While price differences may seem nominal, they can have a significant effect on customers in tight budgets. For a family that uses a dozen eggs a week, the monthly cost could have risen to $ 13 from about $ 5.40.
One complainant, who opened a Fine Fare store in lower Manhattan East, told the New York Attorney General that the prices were “sad and disrespectful.”
“I have lived in the community for 65 years,” the person wrote. “Mimes are ridiculous.”