Food Business News - December 20, 2011 - (Page 10)

Food companies alleging egg price fixing from 1999 to 2008 CHICAGO — The Kellogg Co., General Mills, Inc., Kraft Foods Inc., and Nestle USA, Inc. filed suit Dec. 12 in the U.S. District Court for the Northern District of Illinois against several egg producers and egg cooperatives claiming alleged conspiracy to control the supply and prices of eggs. According to the lawsuit, the defendants “unlawfully agreed to and did engage in a conspiracy to control supply and artificially maintain and increase the price of eggs” starting in at least 1999 and continuing through at least 2008. The lawsuit indicated the defendants undertook the alleged conspiracy through a series of collective actions, including shortterm measures, control through the United Egg Producers’ Certified Guidelines, and coordinated, large-scale exports. Regarding short-term measures, the plaintiffs allege the defendants in 1999 and 2000 established a supply adjustment program under which defendants agreed to engage in an immediate 5% flock molt, a 5% reduction of flock inventory in the next 6 to 12 months, and the development of a hatch reduction program. Around the same time, the lawsuit notes that the United States Egg Marketers voted to pursue development of a chick hatch reduction program. In a further short-term measure to control supply, the plaintiffs allege the defendants agreed to a 5% emergency flock reduction in 2001, and an early molt and hen disposal plan in 2002. By at least 2002, the lawsuit claims the defendants realized that the UEP Certified Guidelines “were a more reliable, longterm way to control supply and artificially maintain and increase the price of eggs.” “The UEP Certified Guidelines required defendants to increase the cage space for each laying hen (e.g., from 53 square inches to 67 square inches per hen),” the lawsuit noted. “Defendants agreed that this minimum floor space allowance would be achieved in part through a chick hatch reduction, which had the effect of limiting a producer’s supply. Further, defendants adopted this minimum floor space allowance with the understanding that hens displaced by lower density cages would not be replaced by building new facilities. The UEP Certified Guidelines had a direct and substantial impact on egg prices.” Also as part of the UEP Certified Guidelines, the lawsuit said defendants imposed a series of monthly and other reporting requirements as well as annual or other periodic audits “to enforce the conspiratorial agreements and to provide a means to monitor for and detect cheating.” At a UEP annual board meeting in October 2002, the lawsuit noted that defendants adopted the “100% Rule,” a rule that required each participant to produce all its eggs in compliance with the UEP Certified Guidelines, including eggs that the defendants purchased for resale. “Defendants used this 100% Rule to extend the supply control requirements of the UEP Certified Guidelines to non-member producers,” the lawsuit said. The defendants in the lawsuit include United Egg Producers, Inc.; United States Egg Marketers, Inc.; CalMaine Foods, Inc.; Daybreak Foods, Inc.; Hillandale Farms of Pa, Inc.; Michael Foods Inc.; Midwest Poultry Services, L.P.; National Food Corp.; Nucal Foods, Inc.; Ohio Fresh Eggs, L.L.C.; Rose Acre Farms, Inc.; R.W. Sauder, Inc.; and Sparboe Farms, Inc. In an interview with Bloomberg, Timothy Dawson, chief financial officer of Cal-Maine Foods, said the company is aware of the lawsuit and would defend itself against the allegations. FBN Nestle details progress made on nutrition front NEW YORK — New nutrition, health and wellness initiatives, new partnerships and the launch of campaigns to increase nutrition awareness were among the areas of progress scored by Nestle S.A. during 2011. “As a core component of Nestle’s ‘Good Food, Good Life’ business philosophy, we are continually working to improve both the quality and quantity of nutritious and delicious products that can be enjoyed by every member of the family and for every way of life,” said Chris Johnson, Nestle’s zone director for the United States, Canada, Latin America and the Caribbean. “With obesity rates on the rise, especially among younger Americans, Nestle recognizes that maintaining a healthy lifestyle requires making smart choices.” During 2011, Nestle launched the Healthy Steps for Healthy Lives initiative and Nestle Pure Life Hydration Movement, joined the Healthy Weight Commitment Foundation, conducted the Nestle Feeding Infants and Toddlers study, launched several new products and continued its work on consumer education. The company also made a range of nutrition and health information easier to access through more comprehensive labeling, additional tools and expanded web sites. Specifically, Nestle enhanced its Nutritional Compass system to help consumers make more informed choices about a healthy balanced diet and lifestyle. The Nutritional Compass, now found on 97% of Nestle packages worldwide, is designed to be “a clear, transparent labeling guide that goes beyond listing figures to help consumers choose healthier and better tasting products,” Nestle said. FBN 10 FOODBUSINESS NEWS ® December 20, 2011

Table of Contents for the Digital Edition of Food Business News - December 20, 2011

Food Business News - December 20, 2011
Government to decide on B.P.A. ban by March 31
Dairy Business News - Higher prices lead to sluggish fresh milk sales
Commodity, ingredient prices trending lower at year end
Editorial - Food revolution in wake of food truck growth
Food companies alleging egg price fixing from 1999 to 2008
Nestle details progress made on nutrition front
NPD Group: Restaurant traffic flat in 2011
Yum! raises guidance on global strength
Coca-Cola forms partnerships to develop 100% plant-based bottles
Lempert sees economizing as key trend in 2012
Blount buys Cape Cod Chowder Co.
Falconhead Capital acquires Rita’s Water Ice Franchise
Better margins seen in 2012
Sara Lee to buy Dutch cafe store operator
Sara Lee to base North American Meats in Chicago
Clearer picture of local food
Smithfield Foods income falls 16% in second quarter
Earnings filing delay for Diamond Foods
Health and Wellness - Researchers shed light on probiotics benefits
Ingredient Innovations - Oils factor into french fry innovation
Dairy Business News - Dairy Ingredients Symposium to be held in March
Dairy Business News - Cultures increase cottage cheese yield
Dairy Business News - WhiteWave moves ahead on sustainability initiatives
Dairy Business News - Steve Millard to lead Emmi Roth USA
Dairy Business News - October nonfat dry milk output down 12% from year ago
New Product Trends - Local foods, children's nutrition top N.R.A. trends
New Product Trends - Niman Ranch introduces all-natural beef entrees
New Product Trends - Pamela’s Products launches Whenever Bars
New Product Trends - Mission Foods adds Artisan Style Tortillas
New Product Trends - Sunsweet launches Plum Amazins
Food Ingredients Europe
Ingredient Market Trends
Ingredient Markets
Supplier Innovations and News - Cocoa production method wins Fi Europe honor
Supplier Innovations and News - System reduces acrylamide level in coffee
Supplier Innovations and News - Kalsec introduces specialty flavors
Supplier Innovations and News - Vitiva launches Sweet’nVit stevia brand
Supplier Innovations and News - Spicetec hires technical services specialist
Supplier Innovations and News - Ingredient adds shelf life, works in flavor system
Ad Index
Food Business in the News

Food Business News - December 20, 2011