Retail customers sue chicken producers for price-fixing
Big Chicken’s past continues to come home to roost. Chick-Fil-A added its name to a growing list of major customers suing chicken processors for price-fixing. In a civil lawsuit filed Dec. 4 in U.S. District Court in Chicago, Illinois, and first reported by the New York Times, Chick-Fil-A accused 16 chicken processors of sharing price and bid information that allowed them to artificially fix prices.
The civil action follows criminal indictments by the Justice Department of current and former chicken processing executives following a years-long federal grand jury investigation.
Chick-Fil-A is the largest chicken-based quick-service restaurant in the U.S. Other major chicken customers suing processors include restaurant chain Golden Corral, retailers Albertsons Cos., Kroger, Walmart, and food service distributors Sysco and U.S. Foods. Prosecutors allege the price fixing took place from 2012 into early 2019.
Three of the processors—Tyson Foods, Perdue Farms, and Sanderson Farms—are part of a 4-year-old class action around price fixing that Chick-fil-A has recently joined. Executives and retired executives of all three companies, plus Pilgrim’s Pride, were charged criminally by a federal grand jury in Colorado in June and the names of six more were made public in October (HPJ, Oct. 16).
Pilgrim’s Pride, which was charged along with two of its former CEOs, settled its antitrust case in October by agreeing to pay a fine of $110.5 million and was reported to be cooperating with authorities, as was Tyson’s. The investigation named current and former executives of Koch Foods, Perdue Farms, Tyson Foods, Claxton Poultry Farms and other companies, according to news outlets.
The latest lawsuits add to the legal woes of chicken processors. In January, a group of Georgia chicken farmers sued Pilgrim’s Pride, claiming the processor used Chick-fil-A antibiotic standards as an excuse to break contracts with smaller suppliers. In 2014, Chick-Fil-A announced it would adopt a goal of serving chicken without antibiotics being introduced at any point in the supply chain, a goal it said it reached in September 2019.
Georgia is the largest chicken-producing state, raising 1.3 billion birds in 2019, totaling about 7.5 billion pounds, according to the U.S. Department of Agriculture. Broiler production accounts for almost half of all agricultural produce in Georgia.
David Murray can be reached at [email protected].
