Law professor: Tyson subjected self to antitrust scrutiny

Tyson Foods may have violated the Packers and Stockyards Act (PSA) when it notified poultry growers who supply the company’s plant in Glen Allen, Virginia, that the plant would close.

Roy Graber Headshot
(Yurii Bukhanovskyi| Bigstock)
(Yurii Bukhanovskyi| Bigstock)

Tyson Foods may have violated the Packers and Stockyards Act (PSA) when it notified poultry growers who supply the company’s plant in Glen Allen, Virginia, that the plant would close.

Growers were reportedly notified that the facility would close on May 12, but the PSA calls for companies to give at least 90 days notice before ending a contract.

Peter Carstensen, a professor of law emeritus at the University of Wisconsin-Madison Law School, told Reuters that the shorter time frame could be considered a violation of PSA, and not complying with the standards set in PSA would be a violation of an antitrust law.

If found in violation, Tyson could be subjected to a fine of up to $29,270 fine per contract, Carstensen said.

Carstensen previously served in the antitrust division at the U.S. Department of Justice.

However, a spokeswoman for Tyson Foods told the news organization that it is not canceling any farmers' contracts but rather has committed to pay the growers for the full-term of their remaining contracts. She also said the company is offering the producers a voluntary buyout package, or the option to be paid through the duration of their contracts.

Regardless of which option the farmers take, the company will stop supplying the farms with chicks after March 28.

Tyson Foods announced it would close the Glen Allen plant two weeks ago. At the same time, the company revealed that it would also close its plant in Van Buren, Arkansas. Both facilities are to close on the same day. Tyson cited the “current scale and inability to economically improve operations“ at the two plants as the reason it decided to close them.

Tyson has since announced that it would replace its hatchery in Hope, Arkansas, with a more modern one with an increased capacity.

Headquartered in Springdale, Arkansas, Tyson Foods, according to the WATTPoultry Top Companies survey, processed 206.68  million pounds of ready-to-cook chicken on a weekly basis in 2022. It remains the largest poultry producer in the United States.

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