Chicken Companies Face Lawsuits for Controlling Market Prices

Category: Business

Listening

Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. collusion / kəˈlu ʒən / (n) – secret agreement to do something dishonest
    Example:

    Investigations revealed that there was collusion between the illegal traders and a local police officer.


  2. manipulate / məˈnɪp yəˌleɪt / (v) – to control someone or something, often in an unfair or dishonest way, to gain an advantage
    Example:

    Some online stores put up fake positive reviews to manipulate potential buyers.


  3. strategically / strəˈti ʤɪk li / (adv) – in a way that helps achieve a particular advantage, goal, or purpose
    Example:

    The ad was strategically shown during the football championship, when millions of viewers were watching.


  4. price fixing / praɪs ˈfɪk sɪŋ / (n) – an agreement among companies to sell a product at a particular price that is not determined by competition
    Example:

    The government is investigating the food companies accused of price fixing.


  5. unfounded / ʌnˈfaʊn dɪd / (adj) – without basis or proof
    Example:

    I realized that his statements were unfounded because he could not present any evidence.


Article

Read the text below.

Chick-fil-A and Target are suing poultry processors because of alleged collusion to manipulate chicken prices.


The two companies filed separate lawsuits against more than a dozen chicken sellers, including Tyson Foods, Perdue Farms, and Pilgrim’s Pride. According to the lawsuit filed by Chick-fil-A, the prices of the chicken the company bought were strategically inflated. The restaurant chain claimed that some of the chicken companies shared confidential price and bidding information, which drove the product’s price up.


Target and Chick-fil-A both mentioned in their complaints that they joined an ongoing 2016 class suit that has similar allegations against the chicken sellers. The two companies are asking for unspecified damages caused by the alleged price fixing.


Price fixing has been an issue among poultry producers over the years. In June 2020, executives of Pilgrim’s Pride were accused of illegally manipulating the prices of their chicken that was sold to grocery stores and restaurants.


In response to the recent allegations, Tyson Foods and Perdue Farms released similar statements denying the accusations and claiming that they are unfounded. In contrast, Pilgrim’s Pride agreed to pay $75 million to settle the price-fixing issue.


According to Target spokesperson Jenna Reck, the company filed a lawsuit to hold the chicken processors accountable for their unfair practices and to protect retailers from harmful price fixing in the future. She said Target expects its vendors and partners to be honest with their business transactions so they can continue to give customers low prices.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

• Do you think price fixing is an issue that affects consumers? Why or why not?

• What do you think should happen to the chicken sellers if proven guilty of price fixing? Discuss.


Discussion B

• What should companies do when facing bad publicity for alleged price fixing (e.g. release an official statement, resolve the issue)? Discuss.

• Do you think companies can do anything to prevent false allegations? Why or why not?