What do you call it when would-be competitors embark on a unified strategy to limit supply, drive up prices, and bilk customers of their hard-earned cash? An antitrust conspiracy, of course. But what do you call it when producers of chickens, a staple of the American diet (Wall Street even has a chicken wing index), allegedly go so far as killing their birds early, shipping more eggs, and buying one another’s products to keep public supply low?
According to food distributors suing the industry, it’s called “capacity discipline.”
The $29 billion industry that churns out 90 percent of America’s chickens has engaged in a price-fixing scheme for years, according to the first of a half-dozen lawsuits filed in Chicago federal court this month. And that artificial premium has been passed on to consumers: You’ve been paying 50 percent more for that supermarket rotisserie bird, the lawsuits claim. While producers have been accused of rigging the market before, this litigation may be the largest effort yet to bring such practices to light.
For decades, the price of a broiler—the standard, non-organic, non-halal, non-kosher chicken that makes up 98 percent of what’s sold—followed a boom and bust pattern: Rising demand led to higher prices and more production, then to oversupply and a drop in prices. In 2008 that began to change. The reason, according to the 113-page lawsuit, is that the producers launched a coordinated strategy, one facilitated by shared proprietary information and countless industry events involving top executives. All of the companies raised fewer chickens, holding down supply and driving up the price of the country’s most popular meat.