SAFM - DOJ files antitrust suit over poultry price-fixing

The Department of Justice filed a civil antitrust lawsuit on Monday, accusing three major poultry processors of engaging in a “long-running conspiracy to exchange information about wages and benefits for poultry processing plant workers” and violations of the Sherman Act.

According to the suit filed on Monday, Cargill Meat Solutions Corporation, Sanderson Farms ( NASDAQ: SAFM ), and Wayne Farms were involved in the conspiracy that “pit chicken growers against each other” via deceptive compensation practices. These actions were abetted by data consultancy Webber, Meng, Sahl and Company [WMS], which facilitated collusion.

“Through a brazen scheme to exchange wage and benefit information, these poultry processors stifled competition and harmed a generation of plant workers who face demanding and sometimes dangerous conditions to earn a living,” Principal Deputy Assistant Attorney General Doha Mekki said in a statement announcing the litigation. “Today’s action puts companies and individuals on notice: the Antitrust Division will use all of its available legal authorities to address anticompetitive conduct that harms consumers, workers, farmers and other American producers.”

Regulators are seeking a total ban on WMS from providing surveys or any means of data sharing across any industry, while explicitly prohibiting the poultry producers from sharing any “competitively sensitive” information about plant workers and their compensation. A compliance monitor is also proposed for assignment to each processor, alongside regular inspections by federal regulators. The companies would also be fined $84.8M, collectively, in restitution to the farm workers harmed by the unfair compensation practices.

The full lawsuit announcement is available here . The announcement of the legal proceedings follows shortly after the closure of Cargill’s acquisition of Sanderson Farms .

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