US meatpacker Tyson Foods and local eggs heavyweight Cal-Maine Foods are facing a class action lawsuit linked to the sale of a Tyson facility in Missouri.
In January, it was reported that Cal-Maine, the largest egg supplier in the US, had acquired a broiler processing plant from Hillshire Farm and Jimmy Dean brands owner Tyson in Dexter, Missouri, for an undisclosed sum and planned to convert it to an egg grading facility.
Go deeper with GlobalData
But now a law firm in the state is suing the companies on behalf of 45 local farmers who raised chickens for Tyson.
Their complaint, lodged in the Circuit Court of Stoddard County, Missouri, on 6 June, accuses Tyson of reneging on a promise to refrain from anti-trust behaviour.
The lawsuit, lodged by locally-based legal business The Oliver Firm, said Tyson had assured local and state officials it would sell the site to a competitor after closing two plants in the state earlier this year but instead sold it to Cal-Maine.
The plaintiffs argue this has effectively destroyed their livelihoods and devalued their farms.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe class action lawsuit claims that Tyson and Cal-Maine conspired to prevent a competing meatpacking company from purchasing the Dexter facility, thereby violating Missouri’s anti-trust laws.
A statement on The Oliver Firm’s website said: “The proposed class is made up of local bootheel family farmers who mortgaged their farms and invested millions of dollars to build infrastructure that was designed and purposed to do one thing: raise chickens for slaughter to feed America’s families.
“Our lawsuit alleges that due to the anti-competitive behaviour of the defendants, those families will never again be able to perform the one job they spent millions of dollars to do.”
In January, Cal-Maine indicated it expected to contact some of the farmers that had supplied the Tyson plant to see if they would switch to supplying eggs.
In a statement at the time, Cal-Maine president and CEO Sherman Miller said: “This transaction is consistent with our growth strategy to expand our business through selective acquisitions in addition to our organic growth initiatives.
“The Dexter location offers an important opportunity to expand our geographic footprint and enhance our ability to serve our valued customers with added production and distribution capabilities in Missouri and surrounding markets.”
The Dexter site was among a clutch of facilities Tyson said last year it would close in a bid to reduce costs against a backdrop of slowing demand and plummeting profits.
The plant was one of four domestic chicken facilities Tyson said in August it would close during the first half of its 2024 fiscal year.
Just Food has asked The Oliver Firm, outside of US office hours, for further information on the newly-announced lawsuit.
Tyson and Cal-Maine have also been asked for their response to the legal action.
A Tyson spokesperson said: “We are disappointed that [grower] Grandview has chosen to litigate against Tyson Foods and Cal-Maine. Tyson has honored its contractual obligations to all growers and continues to pay Grandview even though Grandview has no birds in the field.
“Cal-Maine is investing in the region and has offered Grandview and other growers the opportunity to supply its facility with eggs. The allegations have no merit. On the contrary, Tyson Foods selling its facility to Cal-Maine has brought opportunities to growers that would not have existed if the building had been left empty.”
