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ICYMI last night, I broke a story about a big update in a chicken price-fixing case. Why does it matter? A quick ~thread~. 🐥thefern.org/ag_insider/jus…
This will be the first time that many hear that the DOJ has a grand jury investigation ongoing into the poultry sector. That was revealed in a Tyson quarterly filing in May, but not much has been known about the probe.
On Friday, DOJ filed a motion to stop discovery in a landmark class-action case, brought by Maplevale Farms, that alleges poultry companies colluded to artificially raise chicken prices for distributors, suppliers, and ultimately consumers.
Many companies have now sued and brought similar allegations against the biggest chicken processors, including Walmart, U.S. Foods, Sysco, Conagra, Winn-Dixie, and more. Some background: npr.org/sections/thesa…
Farmers have also sued, alleging poultry companies have coordinated to suppress their wages.
Virtually all of these suits implicate Agri Stats, a secretive information-sharing service for poultry companies, as a key player in the alleged coordination. Read up on Agri Stats: bloomberg.com/news/features/…
The chicken companies in question control about 90 percent of the poultry market: Tyson, Perdue, Pilgrim's Pride, Sanderson Farms, Koch Foods, and more.
Now the big news from Friday: DOJ filed the motion to stop discovery to protect its own investigation—perhaps signaling that criminal charges could be coming, experts say.
"The probability that there was not just an antitrust violation but a criminal violation is such that they now want to stay the discovery so that the grand jury gets first shot at these alleged felons," says one former DOJ antitrust attorney.
What would that mean? Major antitrust action in a sector that has been plagued by allegations of anti-competitive behavior for decades.
For now, discovery in the Maplevale case is temporarily stayed pending a hearing on Thursday. Then, the judge will decide whether discovery should stop for 6 months per DOJ request.
Fin for now. 🐓
