United States: Has Consolidation Made Egg And Poultry Industry Ripe For The Plucking?

Which came first: the chicken or the egg? We may never know the answer to this age-old question. But when it comes to allegations of price-fixing in the poultry and egg industries, at least, the answer appears to be the egg.

Hatching a scheme

The plaintiffs in the long-running In re Processed Egg Products Antitrust Litigation, Case No. 08-md-02002, currently pending in the United States District Court for the Eastern District of Pennsylvania, claim that nearly all major egg producers in the United States conspired to control and limit the country's egg supply starting in January 2000. The plaintiffs in "the Eggs case" include a direct purchaser plaintiff class (i.e., those who bought eggs directly from the defendants), an indirect purchaser plaintiff class (e.g., consumers who purchased eggs from a grocery store), and numerous opt-out plaintiffs who are primarily large grocery retail chains and major food processors. The Eggs case was brought on behalf of purchasers of both "shell eggs" and "egg products," which are defined as any part of shell eggs that have been removed from the shell and processed into dried, frozen, or liquid form.

The plaintiffs note that the egg industry is particularly ripe for the plucking when it comes to anti-competitive behavior. The egg industry has undergone substantial consolidation in the last few years, and a relatively small number of producers control a major share of the egg market. Given that eggs are fungible, consumers typically make the decision of which eggs to purchase based on price. And the demand for eggs is relatively inelastic, which means that consumers will purchase them regardless of prices changes. As such, a small reduction in supply can lead to a sharp increase in price.

Cracking the case

According to the plaintiffs in the Eggs case, the defendants ran "afowl" of the Sherman Act and other antitrust and consumer protection laws by engaging in coordinated efforts to fix, raise, or maintain the price of eggs in the United States. Such efforts purportedly included a 5 percent molting of the flock (i.e., taking chickens out of production) in 1999, a 5 percent emergency flock reduction in 2001, and an animal husbandry program ostensibly created for the care of animals but actually designed to decrease the supply of eggs in 2002. 

In September the court ruled on numerous motions for summary judgment. In five lengthy memorandums, totalling 102 pages, the court largely left the plaintiffs' claims intact. The court did, however, dismiss the plaintiffs' claim for damages for egg product sales on the grounds that the plaintiffs could not distinguish egg products made with eggs produced by the defendants from egg products made with eggs produced by nonparties. The plaintiffs have already appealed this ruling, so the plaintiffs' claim for damages from the sale of egg products may yet hatch into a successful claim.  

Ruffling feathers

Claims of anticompetitive behavior in the poultry industry, in contrast to those in the egg industry, are more recent. The spate of antitrust lawsuits filed against the chicken meat industry in the past several months allege price-fixing going back to 2008. There are currently seven lawsuits pending in the Northern District of Illinois alleging that 98 percent of the U.S. chicken meat industry colluded to fix chicken prices. The plaintiffs, who include both direct and indirect purchasers, claim that the defendants, who include Tyson Foods, Perdue Farms, and Koch Foods, destroyed breeder flocks, purchased each other's products, and shipped excess breeding hens to Mexico. While these lawsuits are still in the beginning stages, Tyson Foods' stock price in early October fell substantially following reports of the allegations. Now that's something to cluck about.

These antitrust cases in the poultry industry have, in turn, led to "follow-on" securities class action lawsuits. In the past month lawsuits have been filed in the Central District of California, the District of Colorado, and the Southern District of New York against poultry producers named in the antitrust lawsuits, along with some of their directors and officers. These securities class actions allege that the defendants made false or misleading statements in violation of federal securities laws by failing to disclose that they colluded to fix poultry prices.


While industry consolidation may breed increased productivity and higher profit margins, it can also result in antitrust (and securities) litigation. Because direct evidence, or the proverbial "smoking gun," is difficult to come by in an antitrust case, plaintiffs are permitted to rely solely on circumstantial evidence to prove an anticompetitive conspiracy. As the Eggs case and the poultry cases show, coordinated efforts by competitors in consolidated industries are highly scrutinized and should be weighed carefully; it may not always be wise for birds of a feather to flock together. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.