Privately held chicken joint Chick-fil-A is suing poultry producers including Tyson Foods (NYSE:TSN), Pilgrim's Pride (NASDAQ:PPC), Sanderson Farms (NASDAQ:SAFM), and Perdue Farms, alleging the chicken farmers colluded to fix prices at artificially inflated prices.
Chick-fil-A purchased billions of dollars worth of broiler chickens from the producers, and claims it overpaid. Broilers account for most chicken meat sold in the U.S.
Ruffling some feathers
Price-fixing scandals are nothing new for the poultry industry; producers have been charged several times over the years for colluding on prices. Earlier this summer, Tyson agreed to snitch on the other companies to the U.S. Justice Department in exchange for a lighter sentence.
Numerous retailers have also filed suit against the producers, including Target, major supermarkets, and food service distributors, and the Justice Department has charged 10 industry executives for their role in the scandal. The agency named Chick-fil-A, Popeyes, Kroger, Walmart as victims of the scheme.
Pilgrim's Pride paid a $110 million fine after pleading guilty earlier this year. Perdue says the lawsuit is without merit.
Chick-fil-A is also suing industry data provider Agri Stats, a firm that is at the center of other meat producer price-fixing lawsuits. In one, pork producers Tyson, Smithfield Foods, and Pilgrim's Pride parent JBS (OTC:JBSAY) stand accused of using the reports Agri Stats produces using confidential information from agricultural companies to coordinate pork pricing as well as the wages they pay farmers.
Chick-fil-A is seeking unspecified damages and legal expenses.