The Real Reason Costco, Trader Joe's, And Whole Foods Are Being Sued

As fears surrounding the COVID-19 virus mounted and shoppers cleared shelves of what they deemed necessities, eggs were one of those items that suddenly everyone wanted. In fact, demand was so high that some grocery stores placed limits on purchases, and the FDA revised its labeling requirements so as not to stymie the flow of eggs from farm to shelf.

In early April, USA Today reported that eggs were experiencing "unprecedented demand," with the Northeast region seeing two to six times the usual purchases. At that time, wholesale prices had tripled over the previous month, and it would be "up to a retailer's discretion whether to pass on the higher wholesale costs to consumers."

However, now a range of companies are being sued for accusations of price gouging on eggs during the pandemic. According to Bloomberg Law, defendants include "producers, wholesalers, and retailers," such as Trader Joe's, Kroger, Amazon-owned Whole Foods, Albertson's, Costco, and Walmart, as well as 15 U.S. farms.

Bloomberg Law reports that a group of consumers filed the suit on April 20 in the U.S. District Court for the Northern District of California, with a "potential class size" of anyone in the state who'd purchased eggs from the defendants since March 4, when California's governor declared a state of emergency.

Behind the lawsuit on price gouging for eggs

As noted in Eat This, Not That!, California penal code 396 states that "it's unlawful for any person, contractor, or business to sell food at a price that exceeds 10 percent immediately before a state of emergency is declared," but the suit charges that eggs had soared by more than 180 percent during the pandemic.

In response, a Trader Joe's rep denied culpability, saying, "...we have not raised our prices on eggs during the time referenced, even while our costs were rising," while Costco also denied price gouging (via Business Insider). Other experts explained that surging demand naturally increases prices.

Interestingly, even the lawsuit itself does not necessarily place blame on every defendant for price gouging on eggs. Bloomberg Law notes that the complaint states " a minimum, some of these defendants did so."

And this isn't the only state where pandemic-related egg prices have ruffled feathers. On April 23, the Texas Attorney General filed a lawsuit against Cal-Maine Foods, which is also named in the California suit and controls "nearly 20 percent of the nation's egg sales" (via ABC News). The suit accuses Cal-Maine of raising prices by 300 percent and asks for more than $100,000 in damages.