Last week in Chicago, Maplevale Farms, a New York-based foodservice distribution company, filed a class action lawsuit accusing 14 poultry processors of illegally manipulating poultry supplies to maintain high prices since 2008. According to the lawsuit, broilers account for 98 percent of all chicken meat sold in the United States, and the named defendants, Tyson Foods, Pilgrim’s Pride, and Sanderson Farms control 90 percent of the market.
Per Maplevale Farms’ 113-page complaint, the company alleges that “at least as early as January 2008 defendants conspired and combined to fix, raise, maintain, and stabilize the price of Broilers.” The complaint further states that, “The principal (but not exclusive) method by which defendants implemented and executed their conspiracy was by coordinating their output and limiting production with the intent and expected result of increasing prices of broilers in the United States.”
Significantly, according to the plaintiffs, the broiler industry abruptly changed around 2008 when “defendants cut their ability to ramp up production for 18 months or more by destroying broiler breeder hens in their broiler breeder flocks responsible for supplying the eggs defendants raise into broilers.”
Per meatingplace.com, the named chicken companies “worked together to artificially reduce broiler chicken supplies in the U.S. marketplace knowing that supply reductions would boost prices. The 14 processors named in the suit allegedly shared confidential information, including news on plant closings, hatching egg export levels and destroying breeder hens, according to the suit.”
Plaintiffs allege in their complaint that with modern technology, “Producers now electronically transfer vast amounts of production data to Agri Stats which, while supposedly anonymous, in fact provide defendants with sufficient detail to determine with reasonable accuracy producer-level data on production, cost, and general efficiencies. This permits the defendants to share, on a weekly and/or monthly basis, their confidential production and pricing information, including forward-looking production information, which is easily forecasted on broiler breeder flock data that is reported and shared.”
The lawsuit seeks damages “to the maximum extent allowed under federal antitrust laws,” including triple damages. A copy of the class action complaint is available here.