February 24, 2021 – Tyson to Settle Broiler Chicken Price-Fixing Litigation for $221.5 Million
Tyson Foods has disclosed in a U.S. Securities and Exchange Commission filing that it will settle all class action claims of price-fixing in the broiler chicken industry for $221.5 million.
The January 19 filing, found here, states Tyson has agreed to settle all claims with regard to the multidistrict litigation titled In re Broiler Chicken Antitrust Litigation, with deals reached between the food processing giant and putative classes of direct purchasers, commercial and institutional indirect purchasers, and end-user consumers. The litigation dates back to September 2016, when Tyson, Pilgrim’s Pride and Perdue were accused of exchanging data on pricing, capacity and sales figures and colluding to raise prices.
“While the Company does not admit any liability as part of the settlements, it believes that the settlements were in the best interests of the Company and its shareholders in order to avoid the uncertainty, risk, expense and distraction of protracted litigation,” the filing reads.
News of the settlement comes in the wake of the U.S. Department of Justice’s indictment last October of 10 executives and employees at major broiler chicken producers for their participation in a price-fixing and bid-rigging conspiracy from at least 2012 until at least early 2019. Six more individuals, including a former Tyson sales exec, were indicted by the DOJ four months later.
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Tyson Foods and its CEO and CFO are the defendants in a class action claiming one of the world’s largest food companies violated federal securities law by engaging in a price-fixing scheme that artificially inflated the company’s profits by restricting the output of “broiler” chickens, which reportedly make up 98 percent of all chicken meat sold in the U.S. To accomplish this, the lawsuit argues, Tyson falsely played up the chicken market in the U.S. as “intensely competitive,” while concealing the true reason behind the company’s high margins and profits from chicken sales.
The lawsuit comes in the aftermath of the unexpected resignation of Tyson’s former CEO Donnie Smith in November 2016. The lawsuit says Smith’s resignation was the result of alleged antitrust conduct.