October 26, 2022

 

Tyson Foods to pay US$10.5 million to settle poultry price-fixing lawsuit

 


Major US meatpacker Tyson Foods will pay US$10.5 million to settle a class action lawsuit that alleges the company increased poultry prices in the US state of Washington since 2008, Food Dive reported.

 

In total, YS$11.7 million has been received in settlement payments from the businesses that were accused of wrongdoing. The majority of Washington State's broiler chicken market is made up of the 16 poultry companies that have not yet resolved their legal disputes, including Pilgrim's Pride, Perdue, the former Wayne Farms, and Sanderson Farms.

 

An investigation, according to the prosecutor Seattle Attorney General Bob Ferguson's office, revealed a coordinated, industry-wide effort to cut production through the exchange of competitively sensitive information, signals during investor calls, and direct coordination between players in the industry. According to the press release, a former Tyson representative acknowledged conspiring with workers from other businesses to raise the cost of chicken sold to restaurants like KFC and Popeye's.

 

In the press release, Ferguson's office mentioned that similar state-level lawsuits against poultry suppliers are currently pending in Alaska and New Mexico.

 

Various parties have brought several federal lawsuits alleging price fixing by significant poultry producers. Foodservice distributor Maplevale Farms sued several chicken producers in 2016 on the grounds that they had manipulated supplies to keep prices high. In response to the US Department of Justice (DOJ) intervention, producers including Tyson and Pilgrim's Pride entered guilty pleas and paid sizable fines.

 

In connection with the alleged scheme, the DOJ also brought charges against former executives of Pilgrim's Pride and Claxton Poultry; however, after three trials, a jury found them not guilty in July.

 

The allegations of price fixing against chicken producers have also led to lawsuits from restaurant chains, CPGs, and food distributors. As a result of the dismissal of many of the cases with prejudice, the plaintiffs are now free to file additional lawsuits of a similar nature.

 

While allegations of price-fixing in the meat industry have long existed, since 2021 they have received more attention. The Biden administration has pledged to increase the transparency of the meat market and committed funds to supporting smaller producers.

 

In an April congressional hearing, Tyson CEO Donnie King defended the business' actions by claiming that the USDA requires producers to report product prices twice daily.

 

-      Food Dive

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