Three of America’s largest poultry producers as well as a data consulting firm have agreed to a proposed settlement of $84.8 million as part of a Justice Department lawsuit that was filed Monday.
The lawsuit and the proposed consent decree, filed in federal court, involve Cargill, Sanderson Farms and Wayne Farms, along with the data consulting company Webber, Meng, Sahl and Co. and its president, G. Jonathan Meng, according to a news release from the Justice Department.
The action comes at a time when the poultry industry has been hard hit on a number of fronts.
Last month, George’s Inc., one of the nation’s largest vertically integrated chicken producers, announced it was shutting down one of its plants in Campbell County, Tennessee.
A recall, fires and bird flu also have contributed to a chicken shortage.
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The U.N. Food and Agricultural Organization’s index for chicken meat prices in June reached its highest level since the series was introduced in 1990, Poultry World reported last week.
The DOJ’s civil antitrust lawsuit alleged there had been a “long-running conspiracy to exchange information about wages and benefits for poultry processing plant workers and collaborate with their competitors on compensation decisions in violation of the Sherman Act,” according to the DOJ release.
The defendants and those cited as co-conspirators who were not named make up about 90 percent of the nation’s poultry processing jobs, according to The Washington Post.
By sharing compensation information, the lawsuit alleged, the companies were able to lessen competition. By doing so, they were able to pay workers less.
Are chicken prices going to rise even further?
“Through a brazen scheme to exchange wage and benefit information, these poultry processors stifled competition and harmed a generation of plant workers who face demanding and sometimes dangerous conditions to earn a living,” Doha Mekki, principal deputy assistant attorney general in the Justice Department’s Antitrust Division, said in a statement.
“Today’s action puts companies and individuals on notice: the Antitrust Division will use all of its available legal authorities to address anticompetitive conduct that harms consumers, workers, farmers and other American producers,” Mekki said.
The settlement prevents the consulting firm from sharing data in any industry that could impact the competition for workers and wages.
The firms would dole out $84.8 million in restitution to workers the Justice Department said were harmed by the companies’ actions.
The consent decree would have a monitor in place for the next 10 years to ensure that the terms of the agreement are kept.
Will need a Bank loan to afford a piece of chicken after they get through ?
The Justice Department is expected to file a lawsuit against some of the largest poultry producers in the country.https://t.co/QjzAiYsPca
— LivinInParadise (@kathy_livin) July 25, 2022
The consent decree would address claims that Sanderson Farms and Wayne Farms have been unfairly treating chicken farmers.
It would prevent the two companies from reducing base payments made to chicken growers, which allegedly was done as a means of punishing underperformers.
The agreement would allow a payment structure with incentives and bonuses.
Bloomberg reported Monday that Cargill, Wayne Farms and attorneys for WMS and Meng didn’t immediately respond to requests for comment, and Sanderson Farms declined to comment.
The DOJ lawsuit comes after the department lost a case this month in which it claimed five chicken companies were involved in price-fixing, according to the outlet.
