Kraft, Kellogg Sue Egg Companies Claiming Antitrust Breach

Kellogg Co. (K), General Mills Inc. (GIS) and units of Kraft Foods Inc. (KFT) and Nestle (NESN) SA sued Cal-Maine Foods Inc. (CALM) and 10 more egg producers for allegedly conspiring to control prices and supplies in violation of antitrust laws.

The plaintiffs, among the world’s biggest makers of packaged food, said in a complaint filed yesterday in federal court in Chicago that they suffered damages as a result of the alleged conspiracy to control the supply of eggs and to artificially maintain and increase pricing.

“Defendants and their co-conspirators controlled and manipulated capacity for production of eggs and egg products,” according to the complaint.

The companies are seeking a court order barring the egg producers’ alleged improper acts and money damages, which can be tripled under federal antitrust law.

Timothy Dawson, chief financial officer of Jackson, Mississippi-based Cal-Maine, said the allegations are similar to those in lawsuits filed in Pennsylvania. He said the company would defend against this one, too.

“We are aware of it,” Dawson said in a phone interview. “This is just another one of those suits.” He declined to comment further.

Cal-Maine is the biggest U.S. producer of fresh eggs, according to its website.

Among the other defendants are Daybreak Foods Inc., Hillandale Farms of Pa. Inc., Michael Foods Inc., Sparboe Farms Inc. and the cooperatives United Egg Producers Inc. and United States Egg Marketers Inc.

The case is Kraft Foods Global Inc. v. United Egg Producers Inc., 11-cv-8808, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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