Golden Corral, White Castle, Cracker Barrel sue Pilgrim’s Pride and other chicken companies in ongoing antitrust row

GREELEY — Three national restaurant chains have filed antitrust lawsuits against Pilgrim’s Pride Corp. (Nasdaq: PPC) and other major players in the chicken industry, claiming that new indictments by the U.S. Department of Justice show they may have been affected by an alleged anti-competitive scheme.

Golden Corral, White Castle and Cracker Barrel filed suits in the U.S. District Court of Northern Illinois last Friday, while Cracker Barrel filed its lawsuit on Monday. The allegations from the three are substantially similar to the antitrust claims in a lawsuit filed by Bob Evans Farms Inc., a subsidiary of Post Holdings Co. (NYSE: POST) in September.

Since that Bob Evans lawsuit, multiple other food companies have filed their own claims, including Wing Zone, East Coast convenience store chain Wawa and Boston Market.

The suits generally claim that large-scale producers like Pilgrim’s, Tyson Foods Inc. (NYSE: TSN), Sanderson Farms Inc. (Nasdaq: SAFM), Perdue Farms Inc. and others agreed to artificially raise the price of chicken since 2008 by, among other tactics, agreeing to coordinate bids to buyers and restrict the supply of birds for sale.

However, White Castle, Golden Corral and Cracker Barrel all said they had no way of knowing about the alleged rigging until the DOJ filed a second round of indictments of chicken executives in October. 

Former CEOs Jayson Penn, William Lovette and other Pilgrim’s employees are being charged as individuals in the DOJ’s ongoing criminal investigation.

Pilgrim’s Pride said it agreed to pay $110.5 million to settle charges against it from the DOJ last week, but the agreement does not protect it from lawsuits filed by its customers.

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