WZ Franchise Corporation, which operates Wing Zone restaurants, filed a complaint on Wednesday in the Northern District of Illinois against at least 18 chicken companies, including Tyson Foods, Pilgrim’s Pride, Sanderson Farms, Wayne Farms and Agri Stats, Inc., alleging the companies’ antitrust activity has negatively affected the plaintiff because the price of chicken was artificially increased.
The 146-page complaint claimed that the companies involved in the “illegal conspiracy” increased and maintained chicken prices since 2008. The plaintiff said the chicken market has a structure that makes it “highly susceptible to collusion” due to the concentrated market with “inelastic supply and demand,” particularly for broiler chickens.
This complaint is also not the first the companies have received from restaurant owners regarding antitrust activity in broiler chicken sales, for example, multiple restaurant groups filed a complaint against many of the same companies in June. The complaint cites government investigations into the alleged antitrust activity. Some of the companies are involved in a Department of Justice investigation.
Broiler chickens are used frequently, especially in restaurants, because they contain a large percentage of meat. The complaint called them a commodity and explained that there is little variation and differentiation between the chicken and suppliers because they all sell USDA Grade A chicken. Thus, the defendants “were forced to compete on price (absent collusion) such that the supply decisions of each Broiler producer impacted the market price for Broilers.” During the alleged conspiracy, the defendants purchased chicken from each other to “absorb excess supply in the market,” according to the complaint.
Although the alleged conspiracy took place between 2008 and at least 2016, the plaintiff claims its request is not barred by the statute of limitations because the conspiracy was “actively concealed” and he could not have known about it until 2020.
The plaintiff purported that Agri Stats participated in the conspiracy and provided detailed reports to the defendants, so that they could watch competitors’ production levels and modify their prices and actions. “Defendants used Agri States as a vehicle by which to unlawfully share pricing and production information with one another in furtherance of their conspiracy,” the complaint stated. The plaintiff said the chicken companys’ actions “negated the economic benefits of increased competition,” and had negative effects on their customers, including Wing Zone.
The WZ Franchise Corporation, represented by Mason Lietz & Klinger, asked the court for a judgment in favor of the plaintiff, damages, and post-judgment interest.