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Texas chicken growers take processors to court for antitrust violation

| Dec 2, 2020 | Commercial Litigation |

Raising chickens takes more than just time and effort. Poultry farmers also need to know some of the basics of business operations and applicable laws. Without this information, it is possible larger corporations will take advantage of farmers.

In a recent case, chicken growers state that meat processors Tyson Foods Inc., Pilgrims Pride’s Corp. and Perdue Foods LLC, along with others, agreed to share information on pricing used to compensate chicken farmers. The farmers claim the poultry processors began sharing this information back in 2008. If the farmers could prove the claim, they will likely have a successful case for an antitrust violation.

What is an antitrust violation?

It is against the law to have too much control over the market. Such actions can result in a monopoly and destroy healthy competition. Price fixing is one example of an antitrust violation. Another common example includes mergers that result in an overly dominant company within any one marketplace.

What happened in this case?

The farmers stated the processing plants worked together to fix the prices paid to poultry farmers. They state the processors did this in a manner that was “anticompetitive, collusive, predatory, unfair and in bad faith.” These practices included sharing compensation rates given to growers in an attempt to artificially depress the compensation rates. Had this information not been shared, the farmers state they would have likely received better compensation for their work.

At this time, the farmers have requested the case go to court with a trial by a jury. The case will likely involve negotiations between the farmers and the poultry processors before moving forward. However, if the farmers have evidence to support the claim, it is likely they will either receive a settlement or move forward with traditional litigation.