CHICAGO – Bob Evans Farms Inc. is suing 19 companies on allegations of colluding to curtail supplies of broiler chickens and manipulate price and contract negotiations for broilers. Bob Evans filed the lawsuit on Sept. 4 in US District Court for the Northern District of Illinois.
The complaint shows Bob Evans has asked for a jury trial and will seek treble damages from the processors, who are liable for Bob Evans' purchases of chicken from at least as early as 2008 through at least as late as 2017. Tyson Foods Inc., Sanderson Farms Inc. and Perdue Farms Inc. were among the 19 poultry processors named as defendants in the lawsuit. A spokesman for Perdue declined to comment, stating “We do not comment on pending litigation.”
The court document states that the defendants "conspired and combined to unlawfully and artificially inflate the price of chicken, beginning in 2008 through at least 2017.
“Through the unlawful agreements and coordinated conduct alleged in this complaint, defendants successfully implemented supra-competitive chicken prices that plaintiff and other purchasers throughout the United States were required to pay,” according to the complaint.
“Defendants’ restraint of trade was implemented through several mechanisms during the relevant period. Among other things, defendants conspired to artificially inflate broiler chicken prices and increase their profits by coordinated reductions in the supply of broiler chickens, manipulation of price and contract negotiations with buyers, and manipulation of price indices that defendants falsely touted as reliable benchmarks in order to justify the inflated chicken prices that buyers were required to pay.”
The complaint noted that Fieldale Farms Corp., which is named as a co-conspirator, already agreed to pay $2.25 million to be released from a separate lawsuit alleging price fixing that was filed in September of 2016.
“Moreover, both the US Department of Justice (“DOJ”) and the Antitrust Section of the Florida Attorney General’s office are currently investigating the industry for anticompetitive practices,” the court document states. “To date, the DOJ’s investigation has resulted in an indictment being filed in the District of Colorado against individuals from defendants, Pilgrim’s Pride and Claxton Poultry. Specifically, the indictment charges Jayson Penn, President and CEO of Pilgrim’s Pride, Mikell Fries, President of Claxton, Scott Brady, Vice President of Claxton, and Roger Austin, Vice President of Pilgrim’s Pride, for conspiring ‘to suppress and eliminate competition by rigging bids and fixing prices and other price-related terms for broiler chicken products sold in the United States’ in violation of Section 1 of the Sherman Act.”
The lawsuit also names Agri Stats, a unit of Eli Lilly and Co. that collects proprietary information about processors, as a co-conspirator. Bob Evans accused Agri Stats of participating in and actively facilitating the defendants’ communications with each other, and providing the data the processors needed to enforce and monitor the conspiracy.
Bob Evans is seeking damages in an amount to be determined at trial, post-judgment interest, attorneys’ fees, litigation expenses, and costs.
The National Chicken Council (NCC), which advocates for the US poultry industry, declined to comment on the litigation.