February 21, 2022

US lawmakers urge Justice Department to oppose Sanderson chicken deal

Senator Elizabeth Warren, supported by other US lawmakers, have urged the US Justice Department to oppose Sanderson Farms deal with Wayne Farms as it raises major antitrust concerns, Reuters reported.

Cargill Inc and Continental Grain Co have announced that they intend to purchase Sanderson Farms and merge it with Continental's Wayne Farms for a deal worth US$4.53 billion. Sanderson Farms is the third biggest chicken producer in the country.

In a letter sent to the Justice Department's Antitrust Division head Jonathan Kanter by the lawmakers, they said the poultry sector has a history of collusion to fix prices for consumers.

They said because of consolidation among chicken producers, chicken farmers may only deal with one or two producers. Warren said the average chicken farmer's pay dropped 6% between 1988 to 2015.

The lawmakers said the merger represents a new threat to building a competitive agricultural sector, especially as the industry is affected by consolidation and illegal behaviours that harm farmers and consumers. They urge the Justice Department to investigate the proposed Sanderson-Wayne deal to determine if it violates antitrust laws and oppose the merger if it does.

Cargill and Continental Grain said the agreement will create a new player that will be able to expand options and increase supply for consumers. The new company will seek new investments to expand operations, create jobs, and benefit local communities in seven US states.

The lawmakers who signed the letter are Senator Elizabeth Warren, Representative Mondaire Jones, Democratic Senators Cory Booker and Richard Blumenthal, independent Senator Bernie Sanders and Democratic Representatives David Cicilline, Hank Johnson and Katie Porter.

-      Reuters