Major US Poultry Producers Face Price-Fixing Investigation

The United States Department of Justice has filed a criminal investigation into claims that some the biggest names in the US poultry industry have orchestrated a massive price-fixing scheme involving, particularly, broiler chickens. 

Last week, the DoJ became involved with a class-action lawsuit—already in progress—in which purveyor Maplevale Farms alleges that some of the top poultry processors in the country were manipulating the price of chicken.  This includes big names that you probably recognize, like Tyson, Perdue, and Pilgrim’s Pride.  That in mind, the DoJ asked a federal judge in Illinois to postpone the court’s discovery process so the federal agency could conduct their own independent investigation into these major poultry companies.  

Essentially, the Department of Justice wants to make sure they have the opportunity to peruse all of the evidence.  This preliminary process should take about six months, after which time the DoJ will either present a case to the US grand jury or will cede that there is not enough evidence to prove “beyond a reasonable doubt” of their guilt. 

In the suit—that is being put on hold for now—Maplevale claims that Tyson Foods, Perdue Farms, Pilgrim’s Pride, and Sanderson Farms have all colluded to drive up the price of broiler chickens.  And they have done so, according to the suit, by destroying flocks of breeder hens, which then reduces reproduction rates.  Furthermore, the suit maintains that these companies used an outside subscription service called Agri Stats to share information between each other regarding data like chicken age and company operating costs. 

Of course trading this type of communication is akin to “insider trading,” something that many would consider far outside what any rational business would do.  The implication, then, is that these companies are not operating as competitive businesses, but as collaborators in a kind of scheme. 

The next step, then, is to let the Department of Justice investigation take its course.  If they find there is, in fact, credible evidence of price fixing, it could definitely lead to criminal charges or other injunctions for each of the four big poultry producers.