Dive Brief:
- Post Holdings, Inc. said it has settled a 2008 class action suit against its Michael Foods unit (which it acquired in 2014), with a $75 million payment to those who filed antitrust claims over the sale of shell eggs, according to a company release.
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“While we remain confident that our conduct has at all times been lawful and entirely appropriate, we believe this settlement is in the best interest of our shareholders, employees, customers and consumers because it effectively eliminates the distraction, expense, and exposure of this complex litigation,” Rob Vitale, President and CEO of Michael Foods, said in the press release.
- The settlement does not affect any other suits filed on behalf of indirect purchasers of shell eggs — who have been unsuccessful in class certification — or dismissed claims by direct purchasers of egg products — which are currently being appealed.
Dive Insight:
The antitrust suit claimed that Michael Foods and other egg producers reduced output and inflated egg prices, and this landmark victory could be just the first in a wave of decisions to come.
Originally, a dozen companies were cited in the class action. Several others have already reached settlement agreements. Through it all, egg price fluctuations haven’t wavered too much.
Despite the settlement, Post Holdings, Inc. registered a lot of volume of call trades and according to Frisco Fastball, 10 out of 10 analysts rate the company as a “Buy,” forecasting a positive outlook ahead.
Egg producers aren't the only ones who have been accused of price fixing. Fourteen poultry producers in Georgia are facing a class action suit that they manipulated prices, and just last week, an executive at Bumble Bee Foods admitted to being involved in a price-fixing conspiracy for packaged seafood products such as canned tuna.