Plant Closure Raises Antitrust Concerns

Tyson Foods recently announced it will be closing a Virginia processing plant in May.  The two-month notice given to its chicken suppliers has raised concerns among farmers and legal experts about Tyson’s compliance with antitrust regulations.  Those regulations require a company like Tyson to give a 90-day notice before they end a contract.  The planned closure means chicken producers are scrambling to find new buyers in a region with few or no options.

According to Reuters there may be forthcoming fines for Tyson under the Packers and Stockyards Act, the U.S. antitrust law requiring the minimum advance warning.  However, Tyson says it’s not canceling any farmers’ contracts and will pay the growers for the full remainder of their contracts, keeping them in compliance with federal antitrust regulations.  Antitrust issues in meatpacking have been a priority for the USDA because four companies control up to 85% of the beef, pork, and chicken markets.

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