Chick-fil-A has filed a lawsuit against 17 major poultry suppliers, claiming that they have illegally coordinated to raise chicken prices. According to Yahoo News report, the fast-food chain charges these suppliers with price-fixing, believing that prices have been kept artificially high. The list of defendants includes Tyson Foods, Perdue Farms, Pilgrim’s Pride and Sanderson Farms.
Chick-fil-A is leading this antitrust lawsuit, arguing that the defendants have broken one of the basic tenants of American capitalism by colluding on these prices. Business reporter Christopher Leonard explained that “the retail side of the chicken industry is at war with the producers,” and the result could be customers “paying more money for a lower-quality product.” The lack of competition among these chicken producers is considered worse for everyone all around, which is why antitrust laws were put in place centuries ago.
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According to the lawsuit, Chick-fil-A has proof that these suppliers were violating those antitrust laws. It alleges that “a number of Defendants communicated via phone and text message in order to share and coordinate confidential bidding and pricing information” in preparation for Chick-fil-A’s switch to antibiotic-free chicken. These details reportedly come from a Justice Department investigation into the poultry industry.
These accusations are not out of the blue, either. Authorities have accused poultry suppliers of “bid-rigging” and “unlawful conspiracy” before, citing times when they believe prices were “artificially raised.” In particular, an anonymous spreadsheet called “AgriStats” is expected to come up in court.
“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 reads.
So far, Sanderson Farms and Pilgrim’s Pride declined to comment on the lawsuit, but Tyson Foods spokesperson Gary Mickelson said: “Follow-on complaints like these are common in antitrust litigation. Such complaints do not change our position that the claims are unfounded. We will continue to vigorously defend our company.”
Perdue Farms spokesperson Diana Souder added: “We believe these claims are unfounded and plan to contest the merits.” Meanwhile, Chick-fil-A spokesperson Chelsea Lee said: “We have nothing to add at this time.”
Chick-fil-A is the largest chicken fast-food restaurant chain by sales volume, making this a serious case for the poultry industry. If that weren’t enough, on Friday, Target filed a similar lawsuit, joining several other supermarket chains in the legal proceedings. If any of these cases go against the chicken suppliers, there could be a serious reckoning on the horizon for the poultry industry.
