Maplevale Farms, one of the country’s leading food service
providers, has brought a federal class action antitrust lawsuit against the country’s top poultry
producers, alleging they conspired to hatch a plan to manipulate the supply of
chicken to keep the price of the birds artificially high, harvesting bumper
On Sept. 2, New York-based Maplevale filed its complaint in
Chicago federal court, naming as defendants many of the largest American
producers of chicken, including Park Ridge-based Koch Foods, Arkansas-based
Tyson Foods, Colorado-based Pilgrim’s Pride, Maryland-based Perdue Farms and
Mississippi-based Sanderson Farms, as well as others. In all, 14 primary
defendants are named, as well as numerous affiliated companies.
The complaint centers on the supply of so-called “broilers,”
the kind of chickens that supply the vast majority of all chicken sold and
consumed in the U.S. According to the complaint, the value of the broiler
market in the U.S. ranged from $21 billion to $31 billion from 2008-2013, and
rose to $32.7 billion in 2014.
According the complaint, at a time their input costs were
falling – in particular, the prices of the corn and soybeans used to feed their
chickens – the prices of broilers remained stubbornly high, relative to past “boom
and bust” cycles.
The lawsuit pinned the blame on the historically unusual
price stability on alleged cooperation between the large poultry producers.
The complaint alleged the big producers used the publication
known as Agri-Stats, a private publication, available only to the producers,
and which regularly updates the conditions of the poultry market, to privately
share information among themselves, so as to together artificially constrict
the supply of poultry, driving up the price.
“If a single Broiler company reduces Broiler capacity, there
is no guarantee that competitors will do the same, and therefore the company
acting alone has simply ceded market share to its competitors,” the complaint
said. “However, if other Broiler companies similarly exercise discipline and
reduce capacity and production, Broiler purchasers will be faced with resulting
higher prices, which they will have no choice but to pay. The alternative – to
not purchase Broilers – is not an option for most of Defendants’ customers.”
However, in reducing supply, Maplevale alleged the poultry
producers went beyond typical, short-term culling measures, such as
slaughtering chickens early or increasing the days between deliveries to
contract farmers, among other possibilities. Instead, Maplevale alleged the
producers took “unprecedented” actions to reduce their flocks, including sharply
reducing their “breeder flocks” – a step historically avoided because it would
leave producers unable to quickly ramp up chicken production in response to
Maplevale said the actions were taken by the industry in
response to calls from Tyson and Pilgrim’s, in particular, to significantly
trim the flocks and pinch supply.
The complaint included a litany of statements attributed to
executives at the large poultry producers calling for cuts, even as their competitors
moved to cut production – a move which Maplevale alleged defied basic market economics.
Maplevale alleged these actions, among others, have driven
the price of the chickens up by about 50 percent since 2008, even though the
price of corn and soybeans have decreased about 20-23 percent during that same
While the poultry producers have cited a host of other
reasons for the increase, including outbreaks of bird flu and import restrictions
overseas, Maplevale brushed those aside, calling them pretextual excuses to
conceal the producers’ collaborative efforts to drive up and fix the price of
Maplevale said it became aware of the pattern from the
investigations of foreign governments in France, Chile, Singapore, Australia
and Indonesia, which “have indicated that collusion is evidently rampant in the
The complaint asked the court to certify a class of
additional plaintiffs, numbering in the thousands, of customers who, like
Maplevale, purchase the chickens from the poultry producers and resell them to
restaurants and other end users.
The lawsuit requested unspecified damages, “to the maximum
extent allowed under federal antitrust laws.” Maplevale asked that the damages
be tripled, as well.
Maplevale is represented in the action by attorneys with the
firms of Hart McLaughlin & Eldridge, of Chicago; Lockridge Grindal Nauen,
of Minneapolis; Pearson Simon & Warshaw, of San Francisco and Sherman Oaks,
Calif.; the Nussbaum Law Group, of New York; and Rupp Baase Pfalzgraf
Cunningham, of Buffalo, N.Y.