The US government, as a part of an investigation into the chicken trade, is attempting to intervene in a price-fixing lawsuit introduced in opposition to the nation’s biggest poultry producers.
The Justice Department had notified Tyson (TSN) in April that it convened a grand jury and subpoenaed the company to provide proof. On Friday, department lawyers requested a judge to halt evidence collection in the lawsuit for six months to make sure the integrity of the grand jury’s investigation. The Justice Department, in its court submission on Friday, mentioned it is pursuing a probe much like the civil complaint.
The underlying case was introduced in September 2016 by Maplevale Farms, a New York meals service distributor.
In line with its criticism, Maplevale claims that 28 chicken companies “conspired and combined to repair, raise, maintain, and stabilize the value of broilers,” that are the predominant kind of chickens raised for production in the USA. Maplevale alleges the chicken producers coordinated their output and reduced chicken production with the intent to increase costs.
The movement was reported on earlier by the Food and Environment Reporting Network and the Wall Street Journal.
Walmart (WMT) joined the fray last month, sueing most of the same poultry companies. Walmart accused the chicken corporations of killing hatchlings to raise costs and ramping up production as soon as prices reached a level they have been satisfied with. It’s unclear under what law Walmart is objecting. Food distribution giant Sysco (SYY) additionally sued the poultry corporations last year.
Tyson, Pilgrim’s Pride (PPC), Sanderson (SAFM) and Perdue collectively control 51% of the chicken business, according to Watt Poultry USA, a poultry industry business publication.
In an announcement Tuesday, Tyson said the Justice Department’s request to intervene in the Maplevale Farms “doesn’t change our view that there’s simply no advantage to the allegations that Tyson Foods colluded with competitors. We stay dedicated to vigorously defending ourselves towards these baseless allegations.”