US government is investigating the chicken industry

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The US government, as part of an investigation into the chicken industry, is trying to intervene in a price-fixing lawsuit brought against the country's bigg...

Posted: Jun 26, 2019 8:59 AM

The US government, as part of an investigation into the chicken industry, is trying to intervene in a price-fixing lawsuit brought against the country's biggest poultry producers.

The Justice Department had notified Tyson in April that it convened a grand jury and subpoenaed the company to provide evidence. On Friday, department lawyers asked a judge to halt evidence collection in the lawsuit for six months to ensure the integrity of the grand jury's investigation. The Justice Department, in its court filing on Friday, said it's pursuing a probe similar to the civil complaint.

The underlying case was brought in September 2016 by Maplevale Farms, a New York food service distributor.

According to its complaint, Maplevale claims that 28 chicken companies "conspired and combined to fix, raise, maintain, and stabilize the price of broilers," which are the predominant type of chickens raised for production in the United States. Maplevale alleges the chicken producers coordinated their output and limited chicken production with the intent to raise prices.

The motion was reported on earlier by the Food and Environment Reporting Network and the Wall Street Journal.

Walmart joined the fray last month, suing many of the same poultry companies. Walmart accused the chicken companies of killing hatchlings to raise prices and ramping up production once prices reached a level they were satisfied with. It is unclear under what law Walmart is objecting. Food distribution giant Sysco also sued the poultry companies last year.

Tyson, Pilgrim's Pride, Sanderson and Perdue collectively control 51% of the chicken industry, according to Watt Poultry USA, a poultry industry business publication.

In a statement Tuesday, Tyson said the Justice Department's request to intervene in the Maplevale Farms "does not change our view that there is simply no merit to the allegations that Tyson Foods colluded with competitors. We remain committed to vigorously defending ourselves against these baseless allegations."

Sanderson said that it "continues to believe the civil plaintiffs' claims as to Sanderson Farms are wholly without merit, and we are committed to defending the case vigorously." Pilgrim's Pride said it "strongly denies any allegations of anti-competitive conduct [and] welcomes the opportunity to defend itself against these claims through the legal process."

The Justice Department declined to comment. Perdue declined to comment.

-- CNN Business' Danielle Wiener-Bronner contributed to this report.

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