Written by: Amie Alexander, JD/MPS Candidate, William H. Bowen School of Law
Twelve Plaintiff organizations have filed a complaint against major poultry companies alleging antitrust violations in the United States District Court for the Northern District of Illinois. Plaintiffs seek damages for purchases of chickens made directly from Defendants “at super-competitive prices” between January 1, 2008 and December 30, 2016. The thirty-two Defendants include Georgia’s Inc., Koch Foods, Inc., O.K. Foods, Inc., Perdue Farms, Inc., Pilgrim’s Pride Corporation, Simmons Foods, Inc., and Tyson Foods, Inc.
Plaintiffs allege that Defendant poultry companies colluded to drive up poultry prices in two steps: (1) reducing the supply of chickens entering the markets at the beginning of the distribution chain, and (2) manipulating a price index used to set wholesale chicken prices for buyers at the end of the distribution chain.
Plaintiffs claim that the coordinated output restriction scheme was facilitated by reports purchased from Defendant Agri Stats, Inc. In addition, Plaintiffs claim that the Defendants’ inflation of prices was accomplished by inflating the “Georgia Dock,” a weekly benchmark price published by the Georgia Department of Agriculture which poultry buyers pay prices based on. This price is based off self-reports from certain Defendants. The Georgia Dock benchmark index was discontinued following increased scrutiny and new price-reporting requirements in November 2016. A new index, the Georgia Premium Poultry Price Index, was introduced thereafter but abandoned in February 2017 due to a lack of participation by producers.
Plaintiffs claim the actions of Defendants restricted and limited the supply of chicken in the United States, engaging in an “unlawful contract, combination, or conspiracy [which] unreasonably restrained trade or commerce in violation of Section 1 of the Sherman Act.” You can read the complaint in its entirety here.