Four restaurant chains have sued the country’s biggest poultry companies, including Tyson Foods and Pilgrim’s Pride, saying they conspired to inflate prices, manipulated price indexes, and restrained production.
Johnny Rockets, FIC Restaurants, Boston Market and Barbecue Integrated sued the chicken producers in separate complaints filed in a federal court in Illinois on June 12. The complaints follow recent antitrust lawsuits filed against major chicken processors by Kraft Heinz Food Company, Sandee’s Catering and other companies.
“Through their collusive, anticompetitive actions, Defendants negated the economic benefits of increased competition. Defendants’ conduct resulted in their customers, including Friendly’s, paying millions of dollars in overcharges to Defendants,” the lawsuit from Friendly’s, an East Coast restaurant chain, said.
The lawsuits came days after Tyson announced it was cooperating with a Justice Department price-fixing investigation and more than a week after the Justice Department indicted four poultry-industry executives from Pilgrim’s Pride and Claxton Farms for conspiring to fix prices and rig bids. Tyson and other chicken processors have faced years of lawsuits from poultry buyers and increased scrutiny from federal agencies, according to the Wall Street Journal.
“Tyson is committed to fostering a free and fair competitive environment and to maintaining strong relationships with our customers, suppliers and partners as we work to put affordable and nutritious food on family tables. Follow-on individual complaints are common in antitrust litigation,” Tyson spokesman Worth Sparkman said. “We will respond to the allegations in the appropriate forum.”
Pilgrim’s Pride did not respond to requests for comment.
According to the lawsuits, the processors decreased the supply of chickens by destroying breeder birds and eggs, which produce chickens that are intended to be slaughtered and eventually consumed. The companies conspired to reduce output, manipulate prices and submit artificially high bids to chicken buyers, including restaurants and supermarket chains through agreements made during trade association meetings, investor conferences and other forms of contact, the lawsuits said.
Agri Stats, a company that allows poultry producers to share financial information with each other, was also alleged to have participated in the conspiracy. The lawsuits claim poultry companies used Agri Stats data to constrain outputs and raise prices and that Agri Stats profited by receiving a share of the revenue the companies earned from the collusion.
Agri Stats did not respond to a request for comment.
Tyson and Pilgrim’s Pride have underperformed the S&P 500 during the COVID-19 recession, but are expected to benefit from increased global poultry demand.
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