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Chick-fil-A accuses poultry suppliers of price fixing

  • ASSOCIATED PRESS / 2012
                                Chick-fil-A, which is based in Atlanta, said poultry suppliers violated federal antitrust laws when they shared confidential bidding and pricing information with one another by phone and text messages.

    ASSOCIATED PRESS / 2012

    Chick-fil-A, which is based in Atlanta, said poultry suppliers violated federal antitrust laws when they shared confidential bidding and pricing information with one another by phone and text messages.

Chick-fil-A, the company that says it invented the chicken sandwich, has accused more than a dozen poultry suppliers in a federal lawsuit of inflating prices on billions of dollars of chicken that it bought.

The company filed the lawsuit Friday in U.S. District Court in Chicago, accusing 16 chicken producers of colluding with one another to manipulate prices after the fast-food chain announced plans in 2014 to serve broiler chicken meat without antibiotics within five years.

Chick-fil-A, which is based in Atlanta, said the suppliers violated federal antitrust laws when they shared confidential bidding and pricing information with one another by phone and text messages.

In the lawsuit, Chick-fil-A said that the suppliers “possessed significant market power in the market for broilers” and that “their conduct had actual anticompetitive effects with no or insufficient offsetting pro-competitive justifications.” The lawsuit seeks unspecified damages and lawyers’ fees incurred by Chick-fil-A, which said that its losses from price fixing would be established during a requested jury trial.

The defendants include Tyson Foods, Perdue Farms, Pilgrim’s Pride and Sanderson Farms, all of which are part of a class-action case over price-fixing allegations that began in 2016 and that Chick-fil-A said in its lawsuit it had joined.

The companies have disputed the allegations in the class-action case. A spokeswoman for Perdue Farms echoed those denials Sunday night when asked to comment on the Chick-fil-A lawsuit.

“We believe these claims are unfounded and plan to contest the merits,” the spokeswoman, Andrea Staub, said in an email.

Tyson Foods said Chick-fil-A’s allegations were without merit.

“Follow-on complaints like these are common in antitrust litigation,” the company said in a statement. “Such complaints do not change our position that the claims are unfounded. We will continue to vigorously defend our company.”

The dispute over chicken prices escalated in June, when the Justice Department indicted two top executives at Pilgrim’s Pride on a price-fixing charge. They have pleaded not guilty.

In October, Pilgrim’s Pride agreed to pay $110.5 million to settle federal charges that it had helped fix prices and then passed on the higher costs for chicken to consumers, restaurants and supermarkets.

Representatives of Pilgrim’s Pride, Tyson Foods and Sanderson Farms did not immediately respond to requests for comment Sunday night.

In June, Tyson Foods said that it was cooperating with a criminal investigation by the Justice Department into the broiler chicken industry. The company said it had been served with a grand jury subpoena from the department’s antitrust division.

A spokeswoman for Chick-fil-A, which has more than 2,400 locations, declined to comment Sunday night.

In 2019, Chick-fil-A posted more than $11 billion in domestic sales, the highest revenue for a fast-food chicken chain in the United States, according to Technomic, an industry research firm. Its sales were nearly triple those of both KFC and Popeyes.

For the past 25 years, Chick-fil-A has featured cows in its advertisements and used the slogan “Eat Mor Chikin” to contrast itself with fast-food chains that mainly serve hamburgers.

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