Major Poultry Processors Slapped With Chicken Antitrust Class Action

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A New York-based foodservice distribution company has filed a proposed antitrust class action lawsuit accusing 14 major poultry processors of conspiring to illegally manipulate certain chicken supplies to maintain high prices since 2008.

Maplevale Farms, one of the country’s leading food service providers, alleges that many of the largest American producers of chicken, including Koch Foods, Tyson Foods, Pilgrim’s Pride, Perdue Farms, Sanderson Farms, and several others conspired to fix, raise, maintain, and artificially increase the price of “broiler” chicken in the U.S. marketplace knowing that supply reductions would boost prices.

The 116-page complaint revolves on the supply of “broilers,” the type of chickens that supply the majority of all chicken sold and consumed in the U.S.

The poultry products the defendants supply for consumption represent about 98 percent of all chicken meat sold in the United States, the lawsuit contends.

The 14 processors named in the chicken antitrust class action lawsuit allegedly exchanged confidential information, including news on plant closings, hatching egg export levels and destroying breeder hens, according to the complaint.

Maplevale Farms alleges these actions, among others, have driven the price of the broiler chickens up by 50 percent in the last eight years despite a 23 percent decline in corn and soybean prices during that period.

“As a result of Defendants’ unlawful conduct, Plaintiff and the other members of the Class paid artificially inflated prices for Broilers during the Class Period,” Maplevale Farms said. “Such prices exceeded the amount they would have paid if the price for Broilers had been determined by a competitive market.”

Specifically, the chicken antitrust lawsuit states that at a time their input costs were falling, particularly the prices of the corn and soybeans used to feed their chickens, broiler chicken prices have steadily increased since 2008, despite a historic trend of boom and bust pricing cycles.

The lawsuit contends that this historically unusual price stability was due to the alleged conspiracy between the defendants.

Maplevale Farms said it became aware of the alleged price-fixing conspiracy from the investigations of foreign governments in France, Chile, Singapore, Australia and Indonesia, which “have indicated that collusion is evidently rampant in the broiler industry.”

“Defendants knew and intended that their coordinated limitation and reduction in Broiler supply would artificially increase all Broiler prices — for spot market and contract sales — above the level they would have been absent the conduct alleged,” Maplevale Farms stated.

Maplevale Farms is asking the court to certify a Class of customers, potentially thousands who, like Maplevale Farms, directly purchase broiler chickens from the defendants and resell them to restaurants and other end users.

The proposed antitrust class action lawsuit requests recovery of unspecified damages, “to the maximum extent allowed under federal antitrust laws.”

Maplevale Farms is represented by Benjamin M. Shrader, Brian H Eldridge, Kyle Pozan and Steven A. Hart of Hart McLaughlin & Eldridge LLC.

The Broiler Chicken Antitrust Class Action Lawsuit is Maplevale Farms Inc. v. Koch Foods Inc., et al., Case No. 1:16-cv-08637, in the U.S. District Court for the Northern District of Illinois.

UPDATE: On Aug. 4, 2017, Fieldale Farms Corp. has agreed to pay $2.25 million to extract itself from a class action alleging they and other fowl companies colluded to drive up the price of broiler chickens.