BENTONVILLE, Ark. — Walmart Inc. filed a lawsuit in the US District Court for the Western District of Arkansas claiming various US poultry companies conspired to inflate chicken prices.
The antitrust lawsuit said significant chicken producers, including Pilgrim’s Pride Corp. and Sanderson Farms, engaged in price fixing from 2008 to 2016. Other defendants named in the latest lawsuit include House of Raeford Farms Inc., Mar-Jac Poultry Inc., O.K. Foods Inc., Foster Farms LLC, Mountaire Farms Inc. and Agri Stats Inc.
"By filing a complaint separate from the class action that began in 2016, we believe we can best protect our business and our customers from artificially increased costs," said Randy Hargrove, Walmart's senior director of corporate communications in a statement. "For more than 50 years, we've focused on giving our customers great deals with an everyday low cost mindset that is core to who we are."
According to court documents, “Defendants’ restraint of trade was implemented primarily through two mechanisms. The first focused on coordinating their output and reducing the supply of broiler chickens into the market. The second focused on (among other things) manipulating price indices with respect to wholesale chicken prices.”
The lawsuit states that the broiler producers coordinated an output restriction with defendant Agri Stats who collected proprietary data from “all defendants and others, including chick breeds, housing used, average size, production and breeder flock levels.
Missing from the lawsuit are Arkansas chicken producers Tyson Foods Inc., George’s Inc. and Simmons Foods Inc. All three are named as defendants in similar pending price fixing cases in IIIinois.
An annual SEC filing from November 2018 showed that Walmart makes up 17.3 percent of the Tyson’s 2018 consolidated sales. The Tyson filing said no other customer or customer group accounts for more than 10 percent of consolidated sales for 2018.
Hargrove said the company would not discuss details of the litigation other than what is in the claims of Walmart's complaint.
The price-fixing litigation began in September 2016 when Maplevale Farms, a food distributor, filed a lawsuit alleging that Tyson and several other poultry companies named conspired as early as January 2008 to “fix, raise, maintain, and stabilize” prices for broiler chickens.
Additional lawsuits have been filed since including one earlier in 2019 when Kraft Heinz Co., Conagra Brands Inc., Nestle USA Inc. and Nestle Purina Petcare Co. filed a lawsuit in Chicago federal court, claiming Tyson Foods Inc., Pilgrim’s Pride Corp. and other poultry processors conspired to inflate chicken prices.
In January, Darden Restaurants Inc., parent company of Olive Garden, Cheddar’s Scratch Kitchen and Longhorn Steakhouse, filed an antitrust suit in the US District Court for the Northern District of Illinois based on similar allegations.
In June 2018, another group of companies opted out of the class-action suit when meat distributors and grocery companies filed a federal antitrust lawsuit of its own (Action Meat Distributors, Inc. et al v. Norman W. Fries, Inc., d/b/a Claxton Poultry Farms, Inc. et al, case number 1:18-cv-03471) in the same district court, alleging a “cartel” of US chicken producers illegally raised the price of broiler chickens from at least Jan. 1, 2008, through Dec. 31, 2016.
On November 2018, attorneys for Fieldale Farms and plaintiffs filed a motion to approve a settlement from the company to release it from the lawsuit. The company has agreed to pay $2.25 million in the settlement.