Friday, February 23, 2018

U.S. poultry farmers sue Koch, Sanderson

A group of poultry growers have sued Sanderson Farms and Koch Foods over “anticompetitive, collusive, predatory, unfair, and bad faith conduct in the domestic (United States) market for broiler growing services.”

The farmers' claims against Koch and Sanderson are spelled out in court documents claiming the two have had agreements for at least 10 years not to compete with one another for growers’ services, preventing the growers from seeking better contracts with other companies and with the “purpose and effect of fixing, maintaining, and/or stabilizing grower compensation below competitive levels.”

Of course, this could not happen in Canada's supply management system, although it could be possible for processors to collude to avoid competition in wholesale markets. I haven't got a shred of evidence that's what happens.

The lawsuit, which seeks class-action status, was filed in U.S. District Court in North Carolina by Haff Poultry Inc.; Nancy Butler; Johnny Upchurch; Jonathan Walters; Myles B. Weaver and Melissa Weaver. They are asking for a jury trial.

Sanderson Farms and Koch are the two named defendants, howeverf, in the court filing the growers allege that Agri Stats of Fort Wayne, Ind. and nearly every major poultry integrator in the country are “agents and co-conspirators.”

The suit claims that the integrators, in violation of the Sherman Antitrust Act and the Packers and Stockyards Act, shared detailed information about how much and how each grower was compensated by way of data provided to Agri Stats, a third-party data aggregation and consulting firm.

Because the data was identified down to the plant location and the flock characteristics, the plaintiffs say companies could easily figure out the details of their contracts with integrators even though names and companies aren’t specifically disclosed.

The plaintiffs also said the companies’ highest-ranking executives exchange pertinent information directly with one another at meetings of the National Chicken Council, but that the information is never disclosed to the growers.

The plaintiffs are asking for the defendants to pay treble damages. plus interest, and for the court to bar the alleged behavior among poultry companies in the future.

Executives at Sanderson Farms and Koch Foods have not yet commented on the lawsuit.