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State Reaches Settlement Over Smart & Final Pandemic Egg Price Gouging Allegations

OAKLAND (CBS SF) -- State Attorney General Rob Bonta announced a settlement with Smart & Final Tuesday, resolving allegations that the grocer engaged in price gouging of certain types of eggs during the COVID pandemic.

Officials claimed that between March 4, 2020 and June 22, 2020, Smart & Final increased the price of four premium egg products beyond what was allowable under the law during California's declared COVID state of emergency.

"It is unacceptable to take advantage of hardworking California families during times of crisis," Bonta said in a news release. "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."

The settlement requires Smart & Final to pay $175,000 in penalties and permanently enjoins the grocery chain from future violations.

On March 4, 2020, Gov. Gavin Newsom declared a state of emergency, triggering California's price gouging protections.

In following weeks, the Attorney General's Office received a large number of complaints reporting dramatic increases in the retail price of eggs. Many of these complaints related specifically to price spikes at Smart & Final stores across the state.

As a seller of consumer goods and food items, Smart & Final was prohibited under state law from increasing its prices on eggs by more than 10%, unless the increase was the result of increased acquisition or labor costs.

Nevertheless, Smart & Final raised the prices even higher. The Attorney General's investigation found that Smart & Final sold over 100,000 cartons of unlawfully priced eggs.

In a statement emailed to KPIX 5, the company said, "Smart & Final is committed to offering customers the everyday low prices they expect from our stores. Since the beginning of the pandemic, we have experienced numerous supplier price increases in multiple product categories. In response to the rapid pace of these price increases, we briefly and unintentionally raised the price of premium eggs to align with supplier price increases on standard eggs. We want our valued customers to know that price gouging has no place in our stores. We will continue to review our pricing to ensure it remains compliant."

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