Smart & Final, a chain of warehouse-style food and supply stores, has agreed to pay $175,000 to settle allegations of engaging in price gouging of certain types of eggs during the Covid pandemic.
In a statement, California Attorney General Rob Bonta said the settlement implies the company paying penalties and permanently enjoins it from future violations of the Unfair Competition Law, or any related Executive Orders related to price-gouging.
The California-based grocer, which operates more than 250 retail stores throughout the western U.S., was accused of increasing the price of four premium egg products beyond what was allowable during a state of emergency between March 4, 2020 and June 22, 2020.
On March 4, 2020, California Governor Gavin Newsom had declared a state of emergency triggering California Penal Code 396’s price gouging protections. On April 3, 2020, Governor Newsom issued an executive order extending price gouging protections for an additional five months.
Following the emergency declaration, the Attorney General’s Office received a large number of price-gouging complaints of dramatic increases in the retail price of eggs, many of which were related specifically to price spikes at Smart & Final stores across the state.
As per the investigation by the AG’s office, Smart & Final sold over 100,000 cartons of unlawfully priced eggs while price gouging protections were in place. It was found that the company, though prohibited, raised the prices of certain products by more than 10% over pre-emergency prices with no accompanying increase in supply costs.
Bonta said, “It is unacceptable to take advantage of hardworking California families during times of crisis. When California first went into lockdown at the beginning of the pandemic, there was a run on essential supplies, and unfortunately, some businesses saw this as an opportunity to pad their bottom line. Let me be clear, price gouging during a declared state of emergency is illegal.”
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