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New suit alleges chicken price fix; four defendants are based in Arkansas

by Nathan Owens | June 30, 2018 at 5:30 a.m.

Kroger Co. and two other supermarket chains on Friday joined a group of corporations suing the chicken industry on allegations it manipulated U.S. broiler chicken prices.

The plaintiffs -- Kroger Co., Albertsons Companies Inc. and Hy-Vee Inc. -- filed an antitrust lawsuit in Illinois federal court that claims more than a dozen chicken companies shared proprietary data to inflate the cost of the nation's supply of chicken.

The list of defendants include leading chicken producers Koch Foods, Sanderson Farms and Pilgrim's Pride. Four of them are based in Arkansas: George's Inc., O.K. Foods, Simmons Foods and Tyson Foods. Arkansas is ranked second in the nation for broiler chicken production.

"We are disappointed by the recent case filed by our customers," a Tyson spokesman said in an email. "Lawsuits like these do not benefit consumers, but only work to enrich opportunistic plaintiff attorneys. Add-on complaints like this do not change our position. The lawsuits are unfounded and we are determined to defend against these baseless claims."

The 130-page document claims the poultry companies manipulated the nation's chicken supply, which inflated the industry's wholesale prices, causing the nation's supermarkets and consumers to pay more for chicken products.

They join a growing group of plaintiffs that claim the $30 billion broiler industry has been rigged for years by about 90 percent of the wholesale chicken market.

A string of chicken price-fixing complaints have been filed in federal court in Chicago, after a judge refused to throw out a class-action lawsuit led by Maplevale Farms that made accusations similar to those made Friday by Kroger. Earlier this year, two of the nation's largest food distributors -- Sysco Corp. and U.S. Foods Holdings Corp -- filed similar complaints in the same court, along with Winn-Dixie stores and sister grocery Bi-Lo Holdings.

Travis Justice, chief economist for the Arkansas Farm Bureau, acknowledged there's been farm consolidation the past 10 to 20 years across the board -- in beef, pork and chicken production -- "which make it ripe for speculation."

"Most accusations like these in the past have been hard, if not impossible to prove," Justice said. "It depends on what evidence they have."

Most meatpackers have denied allegations of price fixing. However, one of the listed defendants, Fieldale Farms, has agreed to settle price-fixing claims for $2.25 million, court documents show. Florida's attorney general is also investigating the industry for anti-competitive practices.

Miami-based law firm Kenny Nachwalter is representing plaintiffs Kroger, Albertsons and Hy-Vee. The firm's attorneys were unavailable for comment on Friday.

Elsewhere, a group of consumers claiming they have been overpaying for bacon, ham and other pork products since 2009 sued the nation's leading pork producers.

Law firm Hagens Berman filed the antitrust lawsuit in a Minnesota federal court Thursday, alleging that a few pork producers, who control 80 percent of the nation's wholesale market, conspired to fix their pork prices. The law firm represents a group of 12 consumers who say they overpaid for branded products from Hillshire Farm and Ball Park Franks, among others.

The 98-page complaint said that through the use of Agri Stats, a subscription service that compiles farm production and sales data, integrated hog producers conspired to create a "stable and successful anticompetitive cartel."

The listed defendants include Agri Stats, Hormel Foods, Smithfield Foods, Tyson Foods, JBS USA, and other leading pork producers.

Springdale-based Tyson Foods declined to comment, saying it had not received formal notice of the complaint.

Minnesota-based Hormel Foods Corp., a 127-year-old food company, issued a response Thursday: "We are confident that any allegations such as these are completely without merit."

Business on 06/30/2018

Print Headline: New suit alleges chicken price fix; Four defendants are based in state


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