Tyson Foods, the nation’s largest chicken producer, will pay Washington $10.5 million to settle a lawsuit that accused it of a long-running scheme to fix prices and rig contracts in coordination with its major competitors.
The settlement, announced Monday by Washington Attorney General Bob Ferguson, is the third since Ferguson sued 19 chicken producers last year, accusing them of conspiring to drive up prices on everything from chicken nuggets to chicken breasts to Popeye’s chicken sandwiches.
Those 19 companies together represent 95% of the broiler chickens sold in America.
Ferguson has reached settlements with two other smaller chicken producers, Mar-Jac Poultry and Fieldale Farms, worth $1.2 million total.
“Folks often say to me, ‘What’s an example of the rigged system?’ This is it,” Ferguson said at a news conference Monday. “I don’t know how much money a corporation needs to make before they come to the conclusion they don’t need to cheat Washingtonians from their hard-earned dollars.”
The price fixing, Ferguson said, affected every Washington resident who bought chicken, about 7 million people.
“They cheated. Rather than compete with their competitors, they conspired with their competitors,” Ferguson said. “You paid more for chicken than you should have because of the illegal conduct of these 19 companies.”
In the settlement, filed in King County Superior Court, Tyson admits no wrongdoing but agrees to cooperate with Ferguson’s ongoing litigation against the 16 other chicken producers.
Tyson did not immediately respond to a request for comment Monday.
Ferguson said the settlement money will be distributed to Washington residents, but, for the sake of efficiency, that will wait until more of the allegations against the 16 remaining companies are settled.
The lawsuit alleged that the 19 chicken producers, beginning in 2008 and continuing through 2019, conspired in four ways to raise prices: They coordinated their output to reduce the supply of chickens available for sale.
This included, according to the lawsuit, destroying entire flocks of breeder hens to cut their ability to ramp up production and maintain artificially high prices.
Second, they submitted anonymous data to a company called Agri Stats.
But, the lawsuit alleged, the data was easily deanonymized, allowing competitors to share sensitive data about things like operations, productivity and costs.
Third, the companies, according to the lawsuit, worked together to manipulate the price indices that set wholesale chicken costs.
Fourth, the lawsuit says the companies coordinated their bids to major buyers, including KFC, Popeye’s and Church’s Chicken.
The lawsuit says company employees called and texted each other discussing pricing, future bids and competitors’ bids to both increase and stabilize prices.
Ferguson’s civil litigation has run concurrently with federal criminal cases and federal class-action lawsuits against chicken producers and their executives.
The Justice Department, earlier this year, dropped charges against five executives at chicken producers, including Tyson Foods, after two prior cases resulted in mistrials.
A case against five other executives resulted in not-guilty verdicts in July.
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