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Chick-fil-A is accusing its suppliers of inflating chicken prices in a federal antitrust lawsuit.
Filed Friday in U.S. District Court in Chicago, the fast food chain claims 16 major chicken producers conspired to artificially fix prices.
After announcing plans to offer antibiotic-free chicken in 2014, Chick-fil-A says its suppliers colluded through phone calls and text messages to coordinate higher bidding and price points on its chicken products.
The defendants in the lawsuit include Tyson Foods, Perdue Farms, Pilgrim’s Pride and Sanderson Farms.
Chick-fil-A says it bought billions of dollars’ worth of broiler chickens from these poultry producers and suffered damage to its business as a result.
“Defendants possessed significant market power in the market for broilers and their conduct had actual anticompetitive effects,” Chick-fil-A said in the lawsuit.
Chick-fil-A uses the broiler chicken, a type of bird The New York Times says most Americans eat, in its signature sandwich, according to the lawsuit.
Last year the chain brought in more than $11 billion in sales, according to Technomic, a foodservice market research firm. Chick-fil-A beat Wendy’s and Burger King in terms of popularity.
The fast food chain’s lawsuit joins litigation already underway.
A class action lawsuit filed in 2016 over chicken prices initially began with plaintiffs from four states claiming antitrust violations dating back to 2007.
This multidistrict lawsuit includes claims from individual consumers as well as companies, court records show.
For years, according to the class action lawsuit, these companies deliberately killed off hens and destroyed eggs to manipulate the market.
Manipulated chicken prices had the Justice Department serving indictments by summer 2020.
Eleven Midwestern attorneys general were asking for investigations into possible price manipulation by meatpackers in May, according to U.S. News and World Report.
By June, four executives from major producers were indicted, including Pilgrim’s Pride CEO Jayson Penn and former vice president Roger Austin. Executives Mikell Fries and Scott Brady of Claxton Poultry were also charged.
All of them “conspired to fix prices and rig bids for broiler chickens across the United States,” according to the indictment.
“The FBI will not stand by as individuals attempt to line their pockets while hard-working Americans and restaurant owners are trying to put food on their tables,” Timothy R. Slater, assistant director in charge of the FBI’s Washington Field Office, said in a press release on the indictment.
By July, an Illinois federal judge approved a $3 million settlement by Amick Farms LLC, Law360 reports. Two months later in September, Amick joined Peco Foods Inc. and George’s Inc. in paying out an additional $13 million in settlements.
October saw Pilgrim’s Pride settling federal charges of inflating chicken prices for $110.5 million, The New York Times reported, something the company says will be accounted for as a “miscellaneous expense” in the next quarter’s report.
The Justice Department’s assistant attorney general in charge of the Antitrust Division says enforcement on price fixing the U.S. food source is crucial.
“Executives who cheat American consumers, restaurateurs, and grocers, and compromise the integrity of our food supply, will be held responsible for their actions,” he said.
The Chick-fil-A lawsuit formally accuses the chicken suppliers of violating the Sherman Act and antitrust laws.
Have you noticed changes in chicken prices at the grocery store? What do you think of the chicken prices lawsuit? Let us know in the comments below.
Counsel representing the plaintiffs in this lawsuit are Matthew J. Calvert, Ryan P. Phair, Craig Y. Lee, Emily K. Bolles, Christopher C. Brewer and John S. Martin of Hunton Andrews Kurth LLP.
The Chicken Prices Lawsuit is Chick-fil-A Inc. v. Agri Stats Inc., et al., Case No. 1:20-cv-07205, in the U.S. District Court for the Northern District of Illinois, Eastern Division.
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344 thoughts onChick-fil-A Joins Legal Fight Against Manipulated Chicken Prices
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I paid almost $15 for a salad using delivery.
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I think that chicken company’s need to pay for the dishonesty that they brought to millions of families nationwide.
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