Washington AG claims chicken suppliers fixed prices

Published 4:30 am Wednesday, October 27, 2021

Washington Attorney General Bob Ferguson has sued 19 chicken companies and a data service, alleging price fixing and seeking fines and restitution for consumers.

Filed Oct. 26 in King County Superior Court, the suit adds to the ongoing civil and criminal complaints that accuse the poultry industry of antitrust violations nationwide.

Ferguson claims that beginning as early as 2008 the companies conspired to raise chicken prices through four mechanisms.

The companies allegedly cut production, inflated price indexes, rigged bids to major buyers such as Kentucky Fried Chicken and monitored each other through reports from Agri Stats.

“If you’ve eaten chicken in the last decade, this conspiracy touched your wallet,” Ferguson said in a statement. “I will hold these companies accountable for the profits they illegally made off the backs of hardworking Washington families.”

The lawsuit claims the defendants violated state antitrust and consumer protection laws. The suit seeks unspecified civil penalties and restitution.

The attorney general’s 96-page complaint alleges that Tyson Foods led an effort to enforce supply discipline by joining Agri Stats in 2007, making sensitive information about the industry’s largest chicken supplier available to competitors.

Efforts to obtain comment from Tyson or Agri Stats were unsuccessful.

Chicken suppliers have been battling antitrust investigations for years.

In a federal class-action lawsuit in Illinois, Tyson, Pilgrim’s Pride and five other chicken suppliers have agreed to pay $180.8 million. Consumers in 24 states, including Oregon and California, are eligible to file claims.

Antitrust laws in those states allow retail customers to sue wholesale suppliers in federal court for price-fixing. Washington law doesn’t give its residents standing to participate in such a federal suit. Alaska, in the same position, has filed a $1 billion lawsuit in state court against chicken suppliers.

The chicken companies that have settled in the federal class-action lawsuit deny any wrongdoing. Some chicken suppliers are still fighting the suit.

As part of their settlements, Tyson and Pilgrim’s Pride have agreed to cooperate with the law firm pressing the lawsuit against the remaining defendants.

The Justice Department has been pursuing a criminal investigation. Pilgrim’s Pride, based in Greeley, Colo., pleaded guilty to price fixing in February and agreed to a $107.9 million fine.

Pilgrim’s Pride ex-CEO Jayson Penn and nine other executives went on trial Monday in Colorado on charges of fixing prices and rigging bids between 2012 and 2019.

Washington suit names broiler chicken suppliers: Tyson Foods, Pilgrim’s Pride, Sanderson Farms, Perdue Farms, Koch Foods, Foster Farms, Mountaire Farms, Wayne Farms; Amick Farms, George’s Inc., Peco Foods, House of Raeford, Fieldale Farms, Case Foods, Mar-Jac Poultry, Claxton Poultry, Simmons Foods, O.K. Foods and Harrison Poultry.

Combined, the companies supply 95% of the nation’s broiler chickens, according to the attorney general’s office.

Based in Fort Wayne, Ind., Agri Stats collects industry data and provides reports for suppliers. The lawsuit alleges the reports allowed the chicken companies to keep abreast of normally secret competitor practices.

The maximum fine for violating Washington’s antitrust law is $900,000, according to the attorney general’s office. The maximum penalty for breaking the consumer protection act is $7,500 per violation.

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