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McDonald’s now alleging poultry industry collusion

Company informs its franchisees that it will seek damages for alleged conspiracy to drive up chicken prices.

McDonald’s informed its franchisees that it would seek money for damages in an alleged conspiracy among the nation’s top poultry companies, in which the companies have been accused of colluding to drive up the price of chicken.

In a memo to its franchisees, obtained by Restaurant Business and other media outlets, McDonald’s specifically mentioned Tyson Foods and Keystone Foods, a poultry company Tyson acquired in 2018.

"McDonald's distribution centers (DCs) may have been victims of the purported conspiracy, unknowingly purchasing broiler chickens from Tyson and Keystone Foods (now owned by Tyson) at alleged wrongfully-inflated prices, which our DCs then resold to McDonald's and franchisees," Marion Gross, McDonald's chief supply chain officer, and Angie Steele, the interim U.S. general counsel wrote in the memo.

While McDonald’s appears to have not yet filed a lawsuit alleging the conspiracy, other major companies have. Among those companies are Walmart, Target, Kroger, Alberstons Companies, Hy-Vee, BJ’s Wholesale Club, Darden, Conagra Brands, Nestle, Kraft Heinz, Boston Market, Chick-fil-A and Johnny Rockets.

Tyson Foods, the largest broiler company in the United States, in January announced that it agreed to pay $221.5 million to settle all class claims related to allegations of a conspiracy to drive up chicken prices. The company said at the time that agreeing to settle did not mean it was admitting guilt, but rather that it wanted to “avoid the uncertainty, risk, expense and distraction of protracted litigation.”

Pilgrim’s Pride, the second largest poultry company in the United States, also announced a settlement in the suit in January, agreeing to pay $75 million to its buyers and settle claims of collusion.

Ten poultry industry executives were indicted in 2020 on federal antitrust charges.

Following numerous lawsuits of alleged U.S. poultry industry collusion to fix the price of chicken, the DOJ filed a motion in June 2019 to intervene in those cases and investigate the claims of the lawsuits.

Par Roy Graber (08/04/2021)

Roy Graber is a senior reporter at WATT Global Media. Contact Graber via email at [email protected]

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Photo : Unsplash

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