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Tyson Foods under federal investigation for alleged price fix

Oscar Rousseau

By Oscar Rousseau+

10-Feb-2017

Tyson Foods is alleged to have fixed the price of boiler chickens
Tyson Foods is alleged to have fixed the price of boiler chickens

Tyson Foods, one of the world’s largest meat processors, is under federal investigation for allegedly colluding with other meat companies to raise the cost of poultry.

The Springdale, Arkansas-based company, said this week in a regulatory filing that it had received what is known as a subpoena from the Securities and Exchange Committee (SEC) on 20 January 2017.

The SEC does not comment on ongoing investigations but Tyson Foods said that, based on its “limited information”, it believed the federal investigation was linked to allegations of poultry price-fixing.

In September 2016, Tyson Foods, Pilgrim’s Pride and big meat firms, faced a class action lawsuit filed by Maplevale Farms. The plaintiff alleged that the aforementioned meat companies had colluded since 2008 to manipulate the price of broiler chickens.

Price fix swindle

Tyson Foods declined to comment on the matter beyond what it said in its regulatory filing. The business has said only that it is “cooperating with the investigation, which is at an early stage”.

Separately, Tyson Foods and several other large poultry processors are facing a class action lawsuit from Haff Poultry Ltd. Filed on 27 January 2017, a group of chicken farmers have alleged that Tyson Foods, among other big meat players, colluded not to compete for the services of farmers to raise chickens.

The plaintiffs allege this was done “with the purpose and effect of fixing, maintaining, and or stabilising grower compensation below competitive levels”. The lawsuit went on to state that there was an agreement made between Tyson Foods and other large poultry corporations “not to solicit or recruit growers from one another”.

The plaintiffs also alleged Tyson Foods and other defendants shared information about farmer compensation data, a violation of the Grain Inspection, Packers and Stockyards Act of 1921 – a bill crafted to promote fair trading practices in the agriculture sector.

The plaintiffs are seeking treble damages.

Tyson Foods said it intended to defend itself against all allegations.

This week the business posted record Q1 results , with CEO Tom Hayes calling it the "best start in the company's history".

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