Alaska takes on 21 companies in a $1 billion price-fixing lawsuit

The state of Alaska filed a lawsuit a $1.05 billion lawsuit against 21 chicken producers, accusing these companies of price fixing. In its filing, the State of Alaska is asking for $50 million in damage and restitution payments from each defendant.

“A cartel of corporate chicken supplier conglomerates has secretly engaged in a vast, illegal conspiracy to restrain production, manipulate pricing, and rig bids in order to artificially inflate the price of broiler chicken throughout the United States, including in the State of Alaska,” the lawsuit stated.

The poultry industry has been embroiled in cases of anti-trust and price fixing for years, and several of the defendants that were named in this lawsuit have faced these accusations multiple times. Tyson Foods Inc., Pilgrim’s Pride Corp., Claxton Poultry, Fieldale Farms, Foster Farms, Koch Foods, Perdue Farms, Sanderson Farms and Simmons Food are among those named in the lawsuit.

In the filing, the State of Alaska points out that the named corporations controlled 90% of the broiler chicken market in the U.S. and that their collusion created an anti-competitive market where prices were artificially inflated. Additionally, the lawsuit pointed out that this was not the first time that many of these corporations were implicated in such a scheme.

Most recently, Pilgrim’s Pride, which is the second-biggest chicken producer in the U.S. and majority-owned by JBS SA, pleaded guilty in February to federal charges and agreed to pay $107.9 million fine to the U.S. Justice Department. Tyson Foods similarly agreed to pay a $221.5 settlement to the U.S. Securities and Exchange Commission, but the company did not admit any liability.

Pilgrim's Pride, Tyson, Sanderson Farms, Koch Foods and Claxton Poultry were all named collectively in a 2016 federal case accusing the group of artificially raising the benchmark prices on the Georgia Dock price index so that wholesale and retail prices deviated from market value at a magnitude that cost U.S. grocery shoppers billions of dollars.

Nor is Pilgrim’s Pride is not out of hot water yet. The company currently has multiple pending lawsuits filed by supermarket and restaurant chains and has repeatedly been a target of the U.S. Justice Department.
Anti-trust allegations have grown in number in recent years and reached outside of just the chicken industry. JBS, Pilgrim Pride’s parent company, was also under scrutiny for its pork pricing and recently settled the class action lawsuit with a $24.5 million direct payment to consumers.

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