The PJ Tatler

Senator Mike Lee Fights Big Government Egg Cartel Campaign Against Small Businesses

The meddling hands of the federal government extend into even the most mundane aspects of American lives, most perniciously into our everyday food choices.  It’s not appropriate for the government to pick winners and losers in business and it certainly is not appropriate for the government to limit the free choice of consumers regarding what food they eat.

Most big-government machinations to influence how and what you eat escape public scrutiny, but Senator Mike Lee (R-UT) is requesting some sunlight on the “alleged anti-competitive campaign” against a small company by the government-supported American Egg Board.

Who is the American Egg Board (AEB) — and did you even know we have a government-appointed board of big agra-business egg industry honchos?

The AEB explains on their website: “The American Egg Board connects America’s egg farmers with consumers, communicates the value of The incredible edible egg™ and receives funding from a national legislative checkoff on all egg production from companies with more than 75,000 hens in the continental United States. AEB’s mission is to increase demand for eggs and egg products through research, education and promotion.”

What interest does the government have regarding America’s egg utilization such that the USDA is involved? The national egg checkoff program imposes a tax on egg producers to fund research and promotion of egg consumption. Federal guidelines prevent this money from being used for political purposes or influencing government policy or action. The USDA’s Marketing Service (yes, the USDA has a marketing arm) conducts oversight of this program and also has guidelines that prevent funds from being used for the purpose of disparaging or depicting other products in a negative or unpleasant light.

The latest controversy surrounds the small company Hampton Creek which makes a product called “Just Mayo,” which I must point out is not technically mayonnaise according to the FDA. The FDA defines mayonnaise as “an emulsion of vegetable oil, an acid like vinegar or lemon juice and an ingredient containing egg yolks” and since the product is vegan, it does not contain any eggs.  “Just Mayo” was warned by the FDA that the product cannot be called mayonnaise.

Below an email from the USDA’s Egg Board about a possible FDA crackdown on a competitor. Joanne Ivy is the president/CEO of the USDA’s Egg Board.

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Apparently, the government-supported AEB has directed a campaign to reduce marketplace demand for the “Just Mayo” product.  Let that sink in. The government may have helped run a campaign against the product of a small business in favor of big industrial corporate marketplace domination. 

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Senator Lee, chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, sent a letter to Agriculture Secretary Tom Vilsack calling for an investigation into some of the activities of the American Egg Board.

“Recent news reports have brought to light a series of emails, obtained under the Freedom of Information Act, that contain compelling evidence that [American Egg Board] leadership, including the Egg Board’s President and CEO, may have violated the federal laws and administrative regulations governing checkoff programs,” the letter reads.

Other information obtained by a FOIA request, according to Lee’s letter, “suggest that members of the AEB staff, USDA officials, and top executives from the egg industry engaged in a strategic, multifaceted campaign to use the power and resources of the federal government to undermine the economic prospects of Hampton Creek, based on their fear that the food start-up’s product, ‘Just Mayo,’ represented a ‘crisis’ and a ‘major threat’ to the egg industry.”

How serious were these fears? Deadly serious?

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A small start-up business represents a MAJOR THREAT and a CRISIS to the entire American egg industry? Ladies and gentlemen, this is crony capitalism at its finest.

Senator Lee wants to get to the bottom of this gross abuse of power. He is asking Vilsack to investigate abuses by the American Egg Board, including the effort to undermine the commercial success of “Just Mayo.” In addition, Lee wants to know if it is ethical for one government agency comprised of private industry executives to petition another federal agency to protect its private, corporate and marketing interests, including urging the FDA to crack down on labeling.

He also asks Vilsack the most important question of all: ARE THESE GOVERNMENT-SUPPORTED PROGRAMS TO PROTECT CORPORATE INTERESTS EVEN NECESSARY?

So what are government checkoff programs? They are programs that collect dues from producers of a specific agricultural product to promote the product and conduct industry research. For some reason, the USDA oversees these programs. Eggs are only one commodity with a checkoff program — milk, beef and pork also have their own government-managed cartels. Membership in these cartels is mandatory. But why? Can’t these companies just form a private collaborative to do the same thing?

Hopefully, Senator Lee will get some answers.