Top U.S. Chicken Producers Sued on Price-Fixing Claims by Buyers
Bob Evans Farms Alleges Tyson, Others Inflated Chicken Prices
(Bloomberg) -- America’s top chicken producers were accused of inflating prices for over a decade, according to lawsuits filed by a U.S. refrigerated-meal supplier, a supermarket chain and a convenience store operator.
Bob Evans Farms Inc., Fresh Market and Wawa Inc. said producers including top three Tyson Foods Inc., Pilgrim’s Pride Corp. and Sanderson Farms Inc curtailed supplies to boost their profits, according to separate lawsuits filed Friday in federal court in Chicago. Buyers are now seeking damages for chicken purchased from as early as 2008 to at least late 2017.
The lawsuits are the latest against chicken companies and other meat producers over how their product is priced and workers are treated in the slaughterhouses that turn animals into food. The U.S. Department of Justice earlier this year indicted Pilgrim’s Pride top boss for price-fixing.
“Historically, the chicken industry was marked by boom and bust cycles,” the chicken buyers said in their lawsuits, filed by the same law firm. “By their wrongful conduct as alleged in this complaint, defendants not only materially reduced or eliminated the historical boom and bust cycle of the chicken industry, they propped up chicken prices during periods of rapidly falling input costs.”
The suits, which also target Koch Foods Inc., Perdue Farms Inc. and Wayne Farms LLC, alleged producers inflated costs through methods including cutting production to manipulating price indices. Like a probe of the beef industry, the complaints also cite the highly concentrated nature of the chicken industry, with a few large players controlling supply.
Tyson, Pilgrim’s Pride and Sanderson Farms did not immediately reply to requests for comment, nor did the trade group National Chicken Council.
Several meat processing plants were forced to shut down this spring as the novel coronavirus spread among workers, with many claiming a lack of protective equipment and social distancing made for unsafe working conditions. Tyson was seeking to have one such case heard in federal court.
An estimated 41,935 workers at U.S. meat plants had confirmed cases of the virus and 200 workers have died, according to Food & Environment Reporting Network data Friday.
Probes against America’s meat producers also intensified at the same time, with the DOJ announcing its indictment, which also included executives from smaller producer Claxton Poultry Farms Inc. Tyson, America’s largest producer, said it was cooperating in the pricing-probe after it uncovered information pertaining to potential wrongdoing and reported it to the DOJ.
The case is Bob Evans Farms v. Tyson Foods, 20-cv-05253, U.S. District Court, Northern District of Illinois (Chicago)
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