Benzinga | Dec 7, 2020 11:51AM EST

Chick-fil-A Takes Legal Action Against Chicken Producers, Alleges Price Fixing

Chick-fil-A is suing its chicken producers, as the chicken sandwich restaurant chain believes illegal price-fixing resulted in billions of dollars of extra costs, according to The Wall Street Journal.

What Happened: Chick-fil-A has proceeded with a lawsuit against its top chicken suppliers, including Tyson Foods, Inc. (NYSE:TSN), Pilgrim's Pride Corporation (NASDAQ:PPC), Sanderson Farms, Inc. (NASDAQ:SAFM) and Perdue Farms according to WSJ.

The lawsuits were filed Friday in an Illinois federal court.

The restaurant chain is seeking financial compensation from suppliers that it accuses of colluding to reduce production to lift chicken prices and coordinated pricing for meat supplies.

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Chick-fil-A's legal team said in the complaint the restaurant "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," according to WSJ.

Why It's Important: Chick-fil-A is among the largest buyers of chicken products. The restaurant chain joins a handful of supermarket chains and food service distributors that have filed similar civil suits against the major chicken players.

The U.S. Justice Department said Chick-fil-A was one of the few companies singled out as a likely victim of price collusion among major chicken suppliers.

Since June, the Justice Department has charged 10 current and ex-chicken company employees, including two former CEOs at Pilgrim's Pride.

What's Next: Tyson and Perdue representatives both told WSJ Chick-fil-A's claims were unfounded and they will contest the allegations. Representatives from the remaining companies declined to comment to the newspaper or didn't respond to requests for comment.