A group of U.S. food distributors and other poultry buyers are suing several poultry processing companies for allegedly conspiring to inflate wholesale prices for chicken. The complaints were filed in federal court in Illinois on January 30.
Companies named in the separate complaints, including Tyson Foods Inc., Pilgrim’s Pride Corp., Perdue Farms, Koch Foods Inc., Sanderson Farms Inc., Wayne Farms L.L.C., Foster Farms, Mar-Jac Poultry, Fieldale Farms, Claxton Poultry Farms and Harrison Poultry Inc., control 80 percent of the chicken supply in the U.S.
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The food distributors, including Sysco Corp., US Foods Holding Corp. and Winn-Dixie Stores, claim the chicken producers coordinated to keep chicken numbers low and prices high.
The two suits are similar to one previously filed by distributor Maplevale Farms in September 2016. The suits say that, beginning in 2008, the chicken companies began to coordinate to cut the country’s chicken supply to drive up wholesale prices.
One of the complaints says the companies made “…unprecedented cuts at the top of the supply chain in the form of jointly and collusively reducing ‘breeder flocks’ that produce chickens ultimately slaughtered for meat consumption.” The suit says the companies eliminated the typical “boom and bust” cycles in the chicken industry by curtailing production, and “propped up chicken prices during periods of rapidly falling input costs by, among other means, coordinating supply restrictions and manipulating one or more broiler price indices.”
Companies deny allegations
The companies named in the lawsuits deny the allegations and say they will defend themselves. They all deny collusion.
“Follow-on complaints like these are common in antitrust litigation,” Tyson said in a statement. “Such complaints do not change our position that the claims are unfounded. We will continue to vigorously defend our company.”
The U.S. Securities and Exchange Commission (SEC) and the Florida attorney general opened investigations into the chicken companies related to these allegations in 2017. The SEC concluded its probe without any enforcement action, while the Florida investigation is ongoing.
