A
group of poultry growers have sued Sanderson Farms and Koch Foods over
“anticompetitive, collusive, predatory, unfair, and bad faith conduct in the
domestic (United States) market for broiler growing services.”
The
farmers' claims against Koch and Sanderson are spelled out in court documents
claiming the two have had agreements for at least 10 years not to compete with
one another for growers’ services, preventing the growers from seeking better
contracts with other companies and with the “purpose and effect of fixing,
maintaining, and/or stabilizing grower compensation below competitive levels.”
Of course, this could not happen in Canada's supply management system, although it could be possible for processors to collude to avoid competition in wholesale markets. I haven't got a shred of evidence that's what happens.
The
lawsuit, which seeks class-action status, was filed in U.S. District Court in
North Carolina by Haff Poultry Inc.; Nancy Butler; Johnny Upchurch; Jonathan
Walters; Myles B. Weaver and Melissa Weaver. They are asking for a jury trial.
Sanderson
Farms and Koch are the two named defendants, howeverf, in the court filing the
growers allege that Agri Stats of Fort Wayne, Ind. and nearly every major
poultry integrator in the country are “agents and co-conspirators.”
The
suit claims that the integrators, in violation of the Sherman Antitrust Act and
the Packers and Stockyards Act, shared detailed information about how much and
how each grower was compensated by way of data provided to Agri Stats, a
third-party data aggregation and consulting firm.
Because
the data was identified down to the plant location and the flock
characteristics, the plaintiffs say companies could easily figure out the
details of their contracts with integrators even though names and companies
aren’t specifically disclosed.
The
plaintiffs also said the companies’ highest-ranking executives exchange
pertinent information directly with one another at meetings of the National
Chicken Council, but that the information is never disclosed to the growers.
The
plaintiffs are asking for the defendants to pay treble damages. plus interest,
and for the court to bar the alleged behavior among poultry companies in the
future.
Executives
at Sanderson Farms and Koch Foods have not yet commented on the lawsuit.
