On Eve of Super Bowl, Food Distributors Declare War on Chicken Wing Producers

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Chicken wings in packing. Photo: Vladimir Tronin/Shutterstock.com.[/caption] As football fans across the country purchase millions of chicken wings ahead of Sunday's big game, two major food producers are claiming poultry prices are illegally fixed. US Foods Inc. and Sysco Corp. each filed an antitrust lawsuit in the U.S. District Court for the Northern District of Illinois on Tuesday against more than two dozen poultry companies. The distributors allege the companies, including Tyson Foods, Pilgrim's Pride, Sanderson Farms and Perdue Farms, have engaged in an illegal scheme to keep chicken prices high since as early as 2008 through at least 2016."By their wrongful conduct as alleged in this complaint, defendants not only materially reduced or eliminated the historical boom and bust cycle of the chicken industry, they propped up chicken prices during periods of rapidly falling input costs by, among other means, coordinating supply restrictions and manipulating one or more broiler price indices," the complaints said. US Foods and Sysco are represented by veteran commercial litigation partners Scott Gant and Jonathan Shaw of Boies Schiller Flexner's Washington, D.C., office, and associate Kyle Smith. Just a few months ago, Gant argued before the Supreme Court in Patchak v. Zinke,representing a property owner in a separation of powers case. As of Wednesday, the two cases appeared to be assigned to different judges. Judge Charles Norgle is currently in charge of US Foods' lawsuit, and Judge Elaine Bucklo will oversee Sysco's. Tuesday's complaints follow a series of legal wrinkles chicken producers have faced in the past few years. Fieldale Farms, one of the defendants, reached a $2.25 million settlement in a similar class action lawsuit last summer. Florida Attorney General Pam Bondi is also investigating chicken producers, including defendants in the distributors' lawsuits.Spokespeople for Tyson's and Pilgrim's Pride said the claims are meritless, and that the companies look forward to defending their positions in court. A Perdue spokeswoman said the company does not comment on pending litigation, and a spokesperson for Sanderson Farms could not be reached for comment. "Follow-on complaints like these are common in antitrust litigation," said Tyson spokesman Gary Mickelson. "Such complaints do not change our position that the claims are unfounded. We will continue to vigorously defend our company."The lawsuits claim the poultry companies used two "mechanisms" to implement their scheme. First, the complaints say the companies collusively reduced their "breeder flocks," purposely diminishing their ability to increase supply when prices increased. The lawsuit also claims the companies manipulated the "Georgia Dock," a benchmark price compiled by the Georgia Department of Agriculture based on self-reported numbers. The GDA suspended use of the Georgia Dock in late 2016 amid scrutiny from the U.S. Department of Agriculture and media reports.The reduction scheme, the suit claims, was aided by Agri Stats Inc., an industry information company owned by Eli Lilly & Co. Though Agri Stats reports poultry producer information anonymously, the lawsuit claims it provided extremely detailed information that allowed producers to discern each others' identities. Agri Stats is also a defendant in the lawsuit. A company spokesman did not immediately return a request for comment.