That's what began to happen in 2007, according to the lawsuit, when Tyson's, Pilgrim's, and a few smaller producers reduced their output. Tyson's chicken is indistinguishable from Pilgrim's, which is indistinguishable from that of other defendants, such as Perdue Farms, so this plan would work only if the whole industry participated. (Additional defendants either declined to comment or didn't respond.) The plaintiffs seek to stop the alleged conduct and demand triple damages. Tyson Foods, Pilgrim's Pride and Simmons Foods have denied the antitrust allegations and said they would fight the litigation, an antitrust class action led by New York food distributor Maplevale Farms on behalf of other middlemen that purchase directly from the producers. account for two-thirds of the world's broiler supply. Exports are expected to reach a record 10.8 million tons in 2016, according to another USDA report.
producers raised 8.69 billion broilers weighing 53.4 billion pounds, according to the Department of Agriculture. All of the companies raised fewer chickens, holding down supply and driving up the price of the country's most popular meat. The reason, according to the 113-page lawsuit, is that the producers launched a coordinated strategy, one facilitated by shared proprietary information and countless industry events involving top executives. While producers have been accused of rigging the market before, this litigation may be the largest effort yet to bring such practices to light.įor decades, the price of a broiler-the standard, non-organic, non-halal, non-kosher chicken that makes up 98 percent of what's sold-followed a boom and bust pattern: Rising demand led to higher prices and more production, then to oversupply and a drop in prices. And that artificial premium has been passed on to consumers, who have been paying 50 percent more for that supermarket rotisserie bird, the lawsuits claim. The $29 billion industry that churns out 90 percent of America's chickens has engaged in a price-fixing scheme for years, according to the first of a half-dozen lawsuits filed in Chicago federal court this month. But what do you call it when producers of chickens, a staple of the American diet (Wall Street even has a chicken wing index), allegedly go so far as killing their birds early, shipping more eggs, and buying one another's products to keep public supply low?Īccording to food distributors suing the industry, it's called "capacity discipline."
What do you call it when would-be competitors embark on a unified strategy to limit supply, drive up prices, and bilk customers of their hard-earned cash? An antitrust conspiracy, of course.
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