McDonald's will pursue damages from Tyson and Pilgrim's Pride in chicken price-fixing scandal

  • McDonald’s will pursue damages from Tyson and Pilgrim’s Pride over price-fixing allegations.
  • Tyson and Pilgrim’s Pride settled class-action claims that they artificially inflated chicken prices for years.
  • McDonald’s said in a memo it has been monitoring developments, including recent class settlements.
  • See more stories on Insider’s business page.

McDonald’s is seeking damages after a chicken price-fixing scandal rocked the world of fast food, according to an internal memo obtained by Insider.

On Tuesday, the fast-food giant told franchisees it had informed Tyson and Pilgrim’s Pride, which is owned by meat-industry giant JBS SA, that it will pursue damages related to allegations the brands illegally conspired to raise chicken prices, according to two people who were not authorized to speak on the record about the matter. 

The chicken giants have been embroiled in a price-fixing scandal for years. Tyson, Pilgrim’s, and other major chicken companies have been accused of conspiring to fix prices on chickens from 2008 to at least early 2019. 

“McDonald’s distribution centers (DCs) may have been victims of the purported conspiracy, unknowingly purchasing broiler chickens from Tyson and Keystone Foods (now owned by Tyson) at alleged wrongfully-inflated prices, which our DCs then resold to McDonald’s and franchisees,” Marion Gross, McDonald’s chief supply chain officer, and Angie Steele, the interim US general counsel wrote in the memo that was sent on Tuesday. 

McDonald’s declined to comment on the memo. 

In February, Pilgrim’s Pride pled guilty to conspiring to fix prices for chicken products and agreed to pay $107 million in criminal fines following a Department of Justice investigation. Pilgrim’s previously agreed to pay $75 million to chicken buyers to settle an antitrust lawsuit, according to financial documents filed in January. 

Tyson Foods said in a filing in late January that it will pay $221.5 million to settle class price-fixing claims.

“McDonald’s has been monitoring developments on these antitrust issues, including recent class settlements with Tyson, Pilgrim’s Pride and its parent company, JBS,” Gross and Steele wrote. 

“We have spent considerable time determining the appropriate approach to take based on the facts and our own review, including an analysis of our supply chain to understand the likely impact,” the memo continued. “As a result, we are taking the steps we believe are necessary to try to recover damages that McDonald’s may have experienced.” 

Chicken giants are facing numerous lawsuits over price-fixing claims 

Pilgrim’s Pride and Tyson did not immediately provide Insider with a comment McDonald’s plans to seek damages. 

The biggest class-action suit over price-fixing allegations was filed against a number of chicken suppliers in 2016. Chains such as The Cheesecake Factory, Chick-fil-A, and Olive Garden parent-company Darden Restaurants, as well as supermarkets such as Kroger, Walmart, and Target, have signed onto the case. 

Some companies, including Target and Chick-fil-A, have additionally pursued individual lawsuits against chicken suppliers. While Pilgrim’s Pride and Tyson have settled class-action claims, these individual lawsuits remain in progress. 

Gross and Steele said in the memo that similar cases are pending with the same producers related to pork and beef products, and that McDonald’s is “still evaluating its options with respect to these cases.” 

According to the memo, McDonald’s franchisees will be able to receive a portion of any damages McDonald’s obtains after the deduction of legal fees and expenses. Franchisees also have the option to pursue their own cases independently, Gross and Steele said. 

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