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Darden sues chicken producers

Antitrust complaint alleges price fixing

Darden Restaurants Inc. has sued the nation’s primary chicken producers in federal court, accusing them of selling poultry at artificially inflated prices from 2008 through 2016.

The Orlando, Fla.-based casual-dining company, parent to Olive Garden, LongHorn Steakhouse and other brands, filed its complaint Jan. 25 in the U.S. District Court for Northern Illinois, alleging violations of federal antitrust laws. The suit seeks a jury trial and damages.

Darden claims the producers manipulated poultry prices by conspiring to destroy breeder hens and eggs to reduce the number of chickens on the market and drive up prices.

“This is a case about how a group of America’s chicken producers reached illegal agreements and restrained trade,” the lawsuit stated, “beginning at least as early as 2008 through at least as late as 2016.”

It also alleges manipulation and inflation of chicken prices on the Georgia Dock, a benchmark price index that was suspended in 2016 by its publisher, the Georgia Department of Agriculture, in the wake of questions about its validity.

The index produced lawsuits from major food distributors like Sysco and US Foods, as well as supermarket chains. Darden had been a part of an earlier class-action lawsuit but decided to pull out and file its lawsuit separately.

Defendants, which with subsidiaries total 34, in the Darden suit include such producers as Foster Farms LLC, Harrison Poultry Inc., JCG Foods, Koch Foods Inc., Mountaire Farms Inc., O.K. Farms Inc., Peco Foods Inc., Perdue Farms Inc., Pilgrim’s Pride Corp., Sanderson Farms Inc., Tyson Foods Inc. and others. The lawsuit also named a research company, Agri Stats Inc., as a defendant.

A Perdue spokesman said the company would not comment on pending litigation.

Tyson officials, however, said the antitrust claims were without merit. 

“Follow-on complaints like these are common in antitrust litigation,” said Gary Michelson, a Tyson spokesman, in an emailed statement. “Such complaints do not change our position that the claims are unfounded. We will continue to vigorously defend our company.”

Darden spokesman Rich Jeffers said, “Each one of our brands offers chicken on their menu." Darden has 1,762 restaurants, which also include Yard House, The Capital Grille, Bahama Breeze, Seasons 52 and Eddie V’s.

“We don’t disclose purchase or usage volumes for proprietary reasons," Jeffers said.

Producers of other proteins have also come under antitrust scrutiny and lawsuits.

Last fall, Bumble Bee Foods LLC agreed to plead guilty for its role in a conspiracy to fix the prices of shelf-stable tuna fish, such as canned and pouch tuna, sold in the United States, the U.S. Department of Justice said. 

And last summer, more than a dozen grocery shoppers in Minnesota filed a federal class-action suit against large pork producers that claimed collusion over prices.

Hearing dates have yet to be set in the Darden lawsuit.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

Correction: January 31, 2019
An earlier version of this story mistakenly attributed a comment on pricing to Darden spokesman Rich Jeffers. It was edited to cite his comments accurately.
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