Food Distributors Sue Tyson, Pilgrim's Pride, and Others Alleging Collusion
January 31 2018 - 12:00PM
Dow Jones News
By Jacob Bunge
The two largest food distribution companies in the U.S. have
launched lawsuits against the chicken industry, accusing Tyson
Foods Inc., Pilgrim's Pride Corp., Sanderson Farms Inc. and other
poultry suppliers of manipulating wholesale chicken prices.
Sysco Corp. and US Foods Holding Corp., which supplies food to
U.S. restaurants, hotels and hospitals, alleged in separate
lawsuits that the big chicken processors engaged in a years-long
conspiracy to limit poultry supplies, while pushing prices higher
by manipulating a pricing benchmark.
A Tyson spokesman called the claims "unfounded" and said the
company would contest the lawsuits. Representatives for Pilgrim's
and Sanderson had no immediate comment. Spokeswomen for Sysco and
US Foods declined to comment Wednesday.
The 131-page lawsuits, filed late Tuesday in a federal court in
Illinois, are the latest in a string of lawsuits and probes
involving the companies that control the U.S. chicken industry,
which produces about 41 billion pounds of meat annually for grocery
stores, restaurants, and foreign-based buyers. U.S. consumers this
year are projected to consume a record 92.4 pounds of chicken each,
according to the U.S. Department of Agriculture.
Together Sysco and US Foods represent roughly 25% of the
domestic food distribution business. Regional grocery-store chains
and restaurant companies have filed similar lawsuits against U.S.
chicken companies over the past 18 months, but the food
distributors are the biggest companies so far to allege collusion
among the meat processors that supply an estimated 90% of the
country's chicken.
--Heather Haddon contributed to this article.
(END) Dow Jones Newswires
January 31, 2018 11:45 ET (16:45 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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