For the last decade, Americans who bought chicken from a major supplier have been illegally overcharged. In Washington State, the Attorney General has sued and won over 40 million dollars in consumer refunds. In other states, like Pennsylvania, the Attorney General has yet to do anything to seek restitution.
Americans buy more chicken than any other type of meat protein. The average person eats 96 pounds per year, growing since the 1960s. During the last decade, chicken prices have skyrocketed by over 50%, while chicken feed, which accounts for up to 71% of the cost of raising chickens, has fallen by as much as 21%.
According to Washington State Attorney General Ferguson, major chicken suppliers like Perdue and Tyson have controlled prices by conspiracy for years. In 2021, the Washington State Attorney General filed a lawsuit against 19 chicken producers, accusing them of a wide-ranging illegal conspiracy to inflate and manipulate prices, rig contract bids, and coordinate industry supply reductions to maximize profits. Ferguson’s lawsuit also named an industry data reporting service accused of assisting in the conspiracy.
Most chicken suppliers, rather than fight the suit, settled. After reaching legal resolutions with 15 major chicken producers. AG Ferguson’s office is now returning $40.6 million in restitution to approximately 402,200 low-income Washington households.
The United States Justice Department tried the corporate executive for criminal activities. After one jury could not reach a conclusion, another found the executives not guilty of criminal activity. What came out in the trial was just how much collusion there was. The executives admitted they shared pricing information but claimed it’s not illegal for competitors to do so. Despite text messages showing a Claxton Poultry executive telling a colleague he had phoned a competitor “and told him not to come down on price,” lawyers for the defense insisted that the executives acted independently. As a defense lawyer put it in an opening statement: “Isn’t what happened here what business people do every day, try to find out as much as they can about what their competitors are doing, so they can make their own best decisions about what to do?”
As for the flurry of phone calls that the chicken processors exchanged with one another during critical moments in setting prices, their lawyers said those could have been about anything.
The Justice Department accepted its loss in the criminal trial but not the price-fixing that cost consumers millions. It began focusing on civil lawsuits, filing against Agri Stats Inc., a data collection company that sells information. The Justice Department is claiming Agri Stats organizes and manages anticompetitive information exchanges among broiler chicken, pork, and turkey processors.
In September of this year, the Justice Department sued. The Justice Department alleges that Agri Stats has produced the comprehensive weekly and monthly reports for participating meat processors for years. Spanning hundreds of pages, Agri Stats reports contain recent data relating to sales prices, costs such as worker and farmer compensation, and output often detailed by facility or company. While distributing troves of competitively sensitive information among participating processors, Agri Stats withholds its reports from meat purchasers, workers, and American consumers. The Justice Department alleges the data is used to set prices and output levels.
“The Justice Department is committed to addressing anticompetitive information exchanges that result in consumers paying more for chicken, pork, and turkey,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Anti-trust Division. “This case is the latest effort by the Justice Department to protect American consumers, farmers, and workers from anticompetitive practices in the agriculture industry.”
Will Pennsylvania consumers receive refunds, like consumers in Washington State? The Attorney General’s Site states the Office “through its Anti-trust Section, has the authority to bring civil actions under the anti-trust laws on behalf of the Commonwealth.” Philadelphia Hall Monitor asked Pennsylvania Attorney General Michelle Henry if her office would follow Washington State’s example. We E-mailed: Did Attorney General Henry join the lawsuit? Has she filed a separate lawsuit on behalf of Pennsylvania Consumers? And if not, why not? To date, Attorney General Henry has yet to respond.
Even if our Attorney General has the will to fight for us, and that has yet to be shown, it will not be easy. The power of corporations is so great in Pennsylvania that the state does not have an anti-trust law.
As the Pittsburg Post-Gazette noted in an article about the lack of protection against hospital mergers and price fixing, “In the absence of a state law, Pennsylvania enforces federal anti-trust statutes enacted in the late 19th and early 20th centuries.”
Watch Hall Monitor on Wednesday at 6 pm on Comcast channel 66 Fios channel 29 to hear if the Pennsylvania Attorney General will comment.
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