Chicken suppliers conspired in price-fixing scam: suit

Chicken-loving Americans are getting ripped off.

Two giant food distributors have sued 18 large chicken suppliers claiming they conspired to fix the price of chickens over eight years.

While the lawsuits don’t specify how much the price of chickens were fraudulently inflated by, the distributors — Sysco and US Foods — claimed that hypothetically prices could jump more than 14 percent in a week.

The suppliers, including Perdue, Pilgrim’s Pride and Tyson Foods, carried out their alleged price-fixing scam by controlling supply and rigging a key benchmark index for chicken prices, the lawsuits claim.

In the wake of the suits, filed on Tuesday but made public on Wednesday, shares of Tyson, Pilgrim’s Pride and Sanderson Farms, another supplier, all plunged between 3 and 7 percent.

Sysco and US Foods — which both distribute food to restaurants, hotels and hospitals — claim they paid more than a fair poultry price because of the collusion.

The price spikes caused by the alleged collusion likely hit US households as the increases were passed along.

Americans ate, on average 92.4 pounds of chicken per person in 2018, according to US Department of Agriculture data.

Chicken surpassed beef as the most consumed meat in the US in 1992, and demand continues to grow.

The suppliers could have created a 14 percent spike in prices in just one week, the distributors claimed in their 131-page complaints.

“Hypothetically, if one week the [key benchmark index] was $1.75, and the following week the [suppliers] told the [Georgia Department of Agriculture] that the sales price of their chicken was now $2, the [key benchmark index] was $2 — and the prices that [we] and others paid for chicken increased commensurately,” the distributors claimed in their suit.

Even though demand for chicken has soared, plaintiffs say prices should have gone down.

Chicken prices “remained artificially inflated” between 2014 and 2016, even though “chicken input costs fell significantly,” the complaint alleged.

“Economic theory predicts that in a competitive market, all else being equal, chicken prices similarly would fall,” the complaint added.

Pilgrim’s Pride shares fell 6.3 percent, to $27.77, while Sanderson shares gave up 4.1 percent, closing at $126.90. Tyson shares fell 3.5 percent, to $76.11.

Both Tyson and Sanderson told The Post that they will defend themselves “vigorously.” Reps from Pilgrim’s did not respond to requests to comment.

Reps from US Foods, Sysco and Perdue declined to comment on the pending litigation.