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BJ’s Wholesale Club Files Suit Against Chicken Producers Alleging Price-fixing

Elizabeth DiNardo, Esq. | Associate Counsel

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On August 28, 2018, superstore BJ’s Wholesale Club Inc. (“BJ’s”), filed suit in federal court in the Northern District of Illinois against a group of America’s most successful producers of chicken products, alleging that defendants, including Tyson Foods and Perdue Farms, violated federal antitrust laws by illegally conspiring to increase the price of chicken sold in the United States from 2008 through 2016.

BJ’s argues that defendants reached an illegal agreement to restrain trade, which resulted in supracompetitive chicken prices for sales to superstores like BJ’s, as well as other purchasers throughout the United States. Together, the defendants control 90% of the wholesale chicken market, which is a $30 billion industry. According to the complaint, defendants restrained trade by first meddling in the distribution chain to reduce the supply of broiler chickens into the market; and then obstructing the final stages of distribution by utilizing price-index manipulation with respect to wholesale chicken prices for entities who, like plaintiff BJ’s, purchase the product directly from defendants and their affiliates.

As a consequence of such manipulation, BJ’s argues the price of wholesale chicken has risen nearly 50% since 2008, despite a 20 percent drop in input costs like corn and soybeans during that same time period.

The case is: BJ’s Wholesale Club, Inc. v. Tyson Foods, Inc. et al., Case No.: 1:18-cv-05877, in the U.S. District Court for the Northern District of Illinois.

 


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