KANSAS CITY, MO. – Three national foodservice chains filed lawsuits against major poultry processors seeking the return of overcharges paid on inflated poultry prices. Cracker Barrel Old Country Store filed a lawsuit in US District Court of Northern Illinois against Tyson Foods Inc., Pilgrim’s Pride Corp and other poultry companies on Oct. 19. White Castle and Golden Corral filed lawsuits on Oct. 16.
The lawsuits generally claim that the poultry companies engaged in bid-rigging targeted at foodservice operations and other businesses that purchased broiler chickens in large volumes. The lawsuits also accuse the processors of conspiring to limit competition in the broiler chicken market by reducing and misrepresenting the supply of broilers and manipulating price indices associated with wholesale broiler prices — particularly the Georgia Dock.
In its court filing, Cracker Barrel claims the conspiracy started at least as early as 2012 and continued until at least as late as 2019.
“Cracker Barrel, like many restaurants, contracted directly with defendants for the purchase of their chicken products,” the complaint states. “Defendants used their coordinated manipulation of the wholesale price indices and their coordinated actual and false supply reductions of broilers to enter into contracts to supply the Cracker Barrel system with broilers at artificially inflated prices.
“As a result of defendants’ price-fixing and bid-rigging conduct, defendants were able to exact significant price increases from Cracker Barrel and other restaurants. Defendants adhered to their collusive agreements and understandings throughout the conspiracy period.
“Defendants reaped the benefits of their illegal conduct through their production and sale —directly and through their wholly-owned or controlled subsidiaries and affiliates — of broilers at inflated non-competitive prices. Through their collusive, anticompetitive actions, defendants negated the economic benefits of increased competition. Defendants’ conduct resulted in their customers, including Cracker Barrel, paying millions of dollars in overcharges to defendants.”
Legal actions against major poultry processors are piling up following indictments of poultry company executives by the US Department of Justice (DOJ).
A previous indictment named Jayson Penn, Roger Austin, Mikell Fries and Scott Brady as part of a price-fixing conspiracy. In early October, a federal grand jury indicted six additional defendants as part of the DOJ investigation: Bill Lovette, Timothy Mulrenin, William Kantola, Jimmie Lee Little, Gary Brian Roberts and Rickie Blake.