AG settles price-gouging suit with Sparboe for donation of 1 million eggs

Sparboe Farms, one of Minnesota's largest egg producers, agreed to donate 90,000 dozen eggs to nonprofit groups in the state to settle a lawsuit brought last month by the state Attorney General's Office, which alleged price gouging at the start of the pandemic.

The settlement avoids costly litigation for both sides over pricing activity that's open to dispute.

With the lawsuit, Attorney General Keith Ellison joined prosecutors in other states that say egg producers took advantage of consumers by nearly tripling prices when the pandemic lockdowns began in March 2020.

None of that litigation has produced a guilty verdict, however. Egg producers, including Sparboe, have said prices are set on a market index reported by a trade publisher called Urner Barry.

The Litchfield, Minn.-based egg producer proposed the donation, which amounts to more than 1 million eggs, as a way to resolve the matter while getting eggs to people who need them

"Sparboe has not, does not, and never will engage in the practices alleged by the Attorney General," Britta McGuire, head of marketing for Sparboe, said in statement. "Yet, it is important for us to resolve this in a positive way that will ultimately benefit Minnesotans."

She said the company routinely donates eggs to charitable organizations. Under the terms of the agreement with the Attorney General's office, the donation has to be completed within 18 months.

McGuire noted that, while Minnesota grocers sell eggs from many producers outside the state, Ellison's office had only made allegations against Minnesota firms.

"Equally unclear is why the Minnesota Attorney General sued the farmers and not the wholesalers, or retailers that actually set the prices to the consumer," she wrote. "It is not fair, just, or equitable that the AG would only go after Minnesota farmers, especially when those farmers were merely adhering to contractual pricing dictated by the large wholesalers."

In April 2020, Ellison brought a similar lawsuit against Forsman Farms, an egg producer in Howard Lake, Minn., over the sudden jump in egg prices at the time. The two sides quickly announced a settlement in which Forsman agreed to a price cap of 20% above the level in mid-February 2020.

Gov. Tim Walz on March 13, 2020, signed a peacetime emergency order that forbid Minnesota businesses from raising prices on a number of essential goods, including food, more than 20% from the level in the month before that date.

"We are committed to holding accountable those that sought to take advantage of consumer demand for essential goods during the pandemic," Ellison said in a statement announcing the settlement with Sparboe.

"This resolution both holds Sparboe accountable and serves the public interest by ensuring that 1 million eggs are provided to Minnesotans who need them most," he said.