Wal-Mart Stores Inc (NYSE:WMT) shares took a hit as the company faces a lawsuit regarding its organic chicken eggs.
The suit accuses the retailer of misleading customers regarding its chicken eggs, which the company calls organic, meaning they had access to the outdoors. However, those suing the company claim its chicken eggs were raised by hens in enclosed structures with no access to the outdoors.
The lawsuit is yet another example of how consumers are concerned about the veracity of organic chicken egg production practices, which is a $500 million industry. The concerns are especially great due to the U.S. Department of Agriculture (USDA) recently shelving plans to spell out what exactly it entails when a company says these birds have access to the outdoors.
Walmart sells cartons of eggs to its customers at a premium under the Organic Marketside brand, but all the brand states is that the eggs came from hens with “outdoor access.” There is no information regarding whether or not safe practices were used to raise these hens and eggs.
“Consumers paying more for these eggs have been deceived,” the lawsuit said. “The theoretical ability to view the outdoors is not the same as having access to it.”
Walmart said it has yet to review the allegations, but it was taking them seriously. “We hold our suppliers to high standards and are committed to providing our customers the quality products they expect,” spokesman Randy Hargrove said.
WMT stock fell 0.9% on Tuesday.