Everything You Need To Know About Chick-Fil-A's Price-Fixing Lawsuit

When we go to a quick service restaurant like Chick-fil-A and pay top dollar, we just assume that their sandwiches cost they way they do because they're priced as premium products. Now Chick-fil-A reveals there might have been a sourcing problem all along, because the restaurant chain is suing the biggest poultry producers in the country for inflating the wholesale price of chicken (via The Wall Street Journal). CBS says the lawsuit was filed after a federal grand jury found that chicken growers Pilgrim's Pride and Claxton Poultry fixed prices and rigged bids for broiler chickens between 2012 to 2017. Chick-fil-A is a Claxton customer.

The Chick-fil-A lawsuit names Tyson Foods, Pilgrim's Pride, Sanderson Farms, and Perdue Farms for setting the price of meat, and then cutting production to push up the cost of the product. According to the complaint, Chick-fil-A "purchased billions of dollars worth of broiler chicken from defendants and/or their co-conspirators throughout the relevant period at prices that were artificially inflated."

Chick-fil-A isn't the only institution that has sued the poultry industry; similar lawsuits have been filed by supermarket chains like Kroger, Walmart, and Albertsons. These companies, along with quick service restaurants KFC and Popeyes, were identified by the Justice Department as the victims in an effort by chicken growers to work out their chicken purchasing habits. Poultry firms swapped prices and other details even as they were negotiating supply deals for these restaurants (via Wall Street Journal). Bloomberg says the practice of price fixing began around 2008 and continued for about 10 years after that.

If you're wondering what all this has to do with you, CBS points out that if the price fixing accusations are true, restaurants like Chick-fil-A would have had to pass the cost of these chickens on to consumers. In their lawsuit, Chick-fil-A says it "purchased billions of dollars worth of broiler chicken from defendants and/or their co-conspirators throughout the relevant period at prices that were artificially inflated" and it wants damages to be paid, and their legal fees, covered.

Tyson has said the claims have no basis, and that they had plans to defend the company, while Sanderson has declined to comment.