Grocery store chain Smart & Final entered into a $175,000 settlement with the California Attorney General's Office, resolving allegations that the company engaged in price gouging during the pandemic. The California AG alleged that, in 2020, Smart & Final increased the price of four types of eggs beyond what was allowable under California law during a state of emergency.
In announcing the settlement, California Attorney General Rob Bonta said, "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. Today's settlement should serve as a warning to grocers and other sellers of essential supplies: Follow state price gouging laws, or you will be held accountable
In California, when a state of emergency has been declared, businesses are prohibited from selling consumer goods and many other things for a price that is "more than 10 percent greater than the price charged by that person for those goods or services immediately prior to the proclamation or declaration of emergency, or prior to a date set in the proclamation or declaration."
Here, the California AG alleged that, for more than 100,000 cartons of eggs, Smart & Final engaged in price gouging, by charging consumers prices that had been increased by more than 10% over the pre-emergency pricing.
In addition to requiring a payment of $175,000, the settlement with the California AG's office prohibits Smart & Final from engaging in price gouging in the future.
This isn't the first action we have seen by state attorneys general over price gouging in connection with the sale of eggs. For example, both New York and Texas have brought lawsuits as well.
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