Suppression of Chicken Broiler Grower Compensation Antitrust Class Action

This antitrust class action brings suit on behalf of broiler chicken growers, against a number of companies under the names of Tyson, Pilgrim’s Pride, Perdue, Koch, and Sanderson Farms. The complaint alleges that these “vertically-integrated” companies, which operate broiler processing plants, engaged in anticompetitive behavior in the US domestic market to fix grower compensation “below competitive levels.”

The class for this action is all individuals and entities in the US and its territories that were paid for broiler grow-out services by one of the defendants or co-conspirators in this case, or by a division, subsidiary, predecessor, or affiliate of theirs, at any time between January 27, 2013 and the date when the anticompetitive effects of their conduct end.

The case is brought by plaintiffs Mark McEntire and Karen McEntire. In 2004, they began providing grow-out services for Pilgrim’s in Texas. They “borrowed approximately $100,000 to make improvements to three Broiler houses to Pilgrim’s specifications.” Pilgrim’s later requested more improvements, which cost another $20,000. The complaint says the McEntires “would not have been able to make ends meet with Pilgrim’s compensation, and so worked other full-time jobs while caring for Broilers. In 2014, [the McEntires] quit providing Broiler Grow-Out Services and sold their property.”

According to the complaint, “Broilers—young chickens bred for meat—account for nearly all domestic chicken consumption.” The market is controlled by the defendants, who are known as integrators that the complaint says “control virtually every aspect of Broiler production, although they do not care for the birds themselves. Instead, they enter into contract farming arrangements … with thousands of Growers, which are predominantly small, family-owned farm operations…”

The complaint alleges, “For decades, there has not been a spot or cash market for Broilers, largely because Defendants and their Co-Conspirators … control all aspects of Broiler production…” The defendants in this case, the complaint says, together have contracts for over 60% of the broiler grow-out contracts in the country.

How did the defendants conspire to hold down grower payments? According to the complaint, they first “illegally agreed to share detailed data on Grower compensation with each other…” The information was shared via Agri Stats, purportedly a data service.

In addition, the complaint claims, they entered into an “illegal ‘no poach’ agreement” in which they agreed “not to compete for the services of one another’s Growers,” thus “insulat[ing] themselves from normal competitive pressures that could potentially erode the effects of their information sharing agreement.”

The complaint calls the broiler industry “the most vertically integrated segment of agriculture today.” Within this system, approximately twenty-five integrators buy broilers from approximately 30,000 growers. The complaint alleges that this system has allowed the integrators to transfer the risks of broiler production exclusively to the growers while still controlling all aspects of how the broiler are to be housed, raised, cared for, and sold.

Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

Suppression of Chicken Broiler Grower Compensation Antitrust Complaint

September 11, 2020

This antitrust class action brings suit on behalf of broiler chicken growers, against a number of companies under the names of Tyson, Pilgrim’s Pride, Perdue, Koch, and Sanderson Farms. The complaint alleges that these “vertically-integrated” companies, which operate broiler processing plants, engaged in anticompetitive behavior in the US domestic market to fix grower compensation “below competitive levels.”

Suppression of Chicken Broiler Grower Compensation Antitrust Complaint

Case Event History

Suppression of Chicken Broiler Grower Compensation Antitrust Complaint

September 11, 2020

This antitrust class action brings suit on behalf of broiler chicken growers, against a number of companies under the names of Tyson, Pilgrim’s Pride, Perdue, Koch, and Sanderson Farms. The complaint alleges that these “vertically-integrated” companies, which operate broiler processing plants, engaged in anticompetitive behavior in the US domestic market to fix grower compensation “below competitive levels.”

Suppression of Chicken Broiler Grower Compensation Antitrust Complaint
Tags: Antitrust, Broiler Chickens