Egg City Loses McDonald’s and Ralphs as Customers : Buyers Deny That UFW Strike Against Ventura County Ranch Was Factor in Decision

Egg City, a Ventura County egg ranch operating under bankruptcy court protection in the face of a nearly 6-week-old strike, has lost the McDonald’s fast-food chain and Ralphs supermarkets as customers.

Officials of the United Farm Workers, which represents the 240 striking ranch employees, said their boycott of Egg City products may have been a factor in the two companies’ decisions. Ralphs and McDonald’s, however, denied that the boycott played any such role.

Although Egg City workers did not boycott either Ralphs or McDonald’s, they have set up picket lines at Lucky and Gemco stores in Los Angeles, Oxnard, Santa Maria and Bakersfield, the UFW said.

Al Marasca, executive vice president of marketing for Ralphs, said his company decided to stop buying eggs from Egg City and one of its other three suppliers late last year for business reasons. He said that some Ralphs stores, including one in Bakersfield, may have carried some Egg City eggs until recently.

A McDonald’s spokeswoman, Lana Ehrsam, said the chain’s move had “absolutely nothing” to do with the strike but gave no further details.

Neither company would say how many eggs they bought from Egg City or whether they were major customers.

Karl Lawson, the union’s chief negotiator, speculated that McDonald’s bought as much as 30% of the ranch’s eggs.

Egg City officials declined to comment.

The UFW workers went on strike June 24 after their wages were cut by $2 an hour to between $4.07 and $5.69 an hour.

The pay cuts came a month after Egg City, whose legal name is Careau Group, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, listing $24.1 million in liabilities and $21.5 million in assets. Egg City officials acknowledged that the bankruptcy filing was made in part to pressure the union into accepting wage reductions.

Founded in 1961 by Julius Goldman, Egg City is considered the world’s largest chicken ranch with about 3 million hens producing more than 2 million eggs daily. Before the strike, the company said it expected revenue of $45 million this year.