US chicken producers ordered to face price-fixing claims

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US chicken producers ordered to face price-fixing claims © Reuters. FILE PHOTO: The exterior of the Tyson Fresh Meats processing plant is seen three days after a fire heavily damaged the facility in the Finney County town of Holcomb, Kansas, U.S. August 12, 2019. REUTERS/Adam Shrimplin/File Photo

By Jonathan Stempel

(Reuters) – A federal judge on Friday said Pilgrim’s Pride (NASDAQ:), Sanderson Farms (NASDAQ:), Tyson Foods (NYSE:) and several other companies must face private antitrust litigation accusing them of conspiring to inflate broiler chicken prices by reducing supply.

Restaurants, supermarkets, distributors and consumers have accused chicken producers of having conspired starting in 2008 to inflate prices, through tactics such as restricting production and sharing nonpublic data about supply and demand.

In a 90-page decision, U.S. District Judge Thomas Durkin in Chicago said reasonable jurors could find it more likely than not that Pilgrim’s Pride, Sanderson and Tyson conspired to fix prices.

“There are numerous examples of supposed competitors regularly exchanging sensitive production data with each other,” Durkin wrote. “A jury could find that such conduct is not the behavior of active competitors.”

But the judge also narrowed the case to cover alleged “anomalous decreases in broiler production” in 2008-2009 and 2011-2012.

Durkin dismissed claims relating to supply cuts in 2015-2016 and alleged manipulation of the Georgia Dock broiler price index, saying evidence of a conspiracy was “weak.”

He also dismissed claims against other producers including Perdue, as well as against Agri Stats, whose reports about the industry allegedly let producers monitor each other’s production and pricing activities.

Pilgrim’s Pride, Sanderson and Tyson did not immediately respond to requests for comment after market hours.

The companies have previously settled claims with some of the plaintiffs, including $221.5 million of settlements announced by Tyson.

Pilgrim’s Pride is owned mainly by Brazil’s JBS SA (OTC:).

The case is In re Broiler Chicken Antitrust Litigation, U.S. District Court, Northern District of Illinois, No. 16-08637.

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