News

By Mike Scarcella

Nov 22 (Reuters) - Kraft KHC.O, General Mills GIS.N and other major food companies persuaded a federal jury in Chicago that top U.S. egg producers are liable for unlawfully inflating prices, paving the way for a second trial to determine damages.

The verdict on Tuesday followed a more than five-week antitrust trial against a group of egg producers including Cal-Maine Foods CALM.O, the country's largest egg producer and distributor, and Rose Acre, the second-largest, over claims that they had "rigged" the market by conspiring to charge artificially high prices.

A Cal-Maine representative did not immediately respond to a request for comment, and lawyers for the Ridgeland, Mississippi-based company and other defendants did not immediately respond to similar requests.

Trade associations United Egg Producers and United States Egg Marketers were also found liable. The defendants all denied any wrongdoing.

Kraft and the other plaintiffs, including Kellogg K.N and Nestle NESN.S, next week will argue for damages at a second phase of the trial before the same jury.

The food producer plaintiffs have not proposed a specific damages amount, a spokesperson for their law firm Jenner & Block said on Tuesday.

Jenner lawyer Brandon Fox at trial said the plaintiffs had spent "hundreds of millions of dollars" for egg products. He said Kellogg bought tens of millions of dollars of egg products from Rose Acre.

Fox in a statement said the plaintiffs were "incredibly pleased" by the jury's decision holding the defendants accountable.

Kraft and the other plaintiffs alleged Cal-Maine and the other defendants conspired to limit the supply of eggs in a scheme to boost prices.

"The conspiracy did exist. You know the players. You know who did it. You've had an opportunity to see it day in and day out," Fox told jurors at trial.

The defendants countered that consumer demand and independent corporate interests drove business decisions.

"The toll that this case has taken has been immeasurable," a lawyer for family-owned Rose Acre, James King of Porter, Wright, Morris & Arthur, told jurors.

The plaintiffs anticipate the damages trial will take roughly two days. U.S. District Judge Steven Seeger is overseeing the case.

The case is Kraft Foods Global Inc v. United Egg Producers Inc, U.S. District Court for the Northern District of Illinois, No. 11-cv-8808.

For plaintiffs: Brandon Fox of Jenner & Block

For United Egg Producers and United States Egg Marketers: Robin Sumner of Troutman Pepper Hamilton Sanders

For Cal-Maine: Patrick Collins of King & Spalding

For Rose Acre: James King of Porter, Wright, Morris & Arthur

(Reporting by Mike Scarcella)

((Mike.Scarcella@thomsonreuters.com;))

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