Warren, Jones, Lead Colleagues in Slamming Proposed Sanderson-Wayne Poultry Merger And Call on DOJ To Take Action As Americans Face Soaring Poultry Prices
Sanderson Farms is Already One of the “Big Four” Poultry Producers that Dominate 54% of the Market; Proposed Merger with Wayne Farms Raises Deep Concerns that Further Consolidation will Increase Price-Fixing Schemes, Hurt Farmers and Consumers
Lawmakers: “This mega merger, in a sector already plagued with consolidation and illegal behaviors that harm farmers and consumers alike, represents a new threat to building a competitive marketplace.”
WASHINGTON, D.C. — U.S. Senator Elizabeth Warren (D-Mass.) and Representative Mondaire Jones (D-N.Y.) along with U.S. Senators Cory Booker (D-N.J), Richard Blumenthal (D-Conn.) and Bernie Sanders (I-Vt.), and U.S. Representatives Mark Pocan (D-Wisc.), Katie Porter (D-Calif.), Hank Johnson (D-Ga.), Pramila Jayapal (D-Wash.), Jan Schakowsky (D-Ill.), David Cicilline (R.I.), Jamie Raskin (D-Md.), and Judy Chu (D-Calif.) slammed the proposed merger between Sanderson Farms, the third largest poultry processor, and Wayne Farms, the sixth largest poultry processor, and called on the U.S. Department of Justice (DOJ) to thoroughly review the deal and step in to prevent harm to American farmers and consumers. Poultry is one of the most heavily concentrated industries with the dominant “Big Four” companies — JBS Foods, Tyson, Perdue, and Sanderson — holding a combined 54% of the market. Sen. Warren, Rep. Jones and their colleagues are extremely concerned that further consolidation will raise poultry prices even higher for Americans — chicken prices have increased by 15% compared to pre-pandemic prices — cut pay for farmers, and limit protections for workers.
“The proposed merger raises significant antitrust concerns in an industry already marked by price fixing, labor violations, and intense consolidation. In particular, this proposed merger could increase the major poultry companies’ monopoly and monopsony power, allowing them to raise prices for consumers while cutting pay for farmers and other poultry-industry workers. Given these concerns, we urge the Department of Justice (DOJ) to conduct a thorough review of the proposed Sanderson-Wayne merger to ensure that it does not harm American farmers and consumers,” wrote the lawmakers.
The lawmakers raised alarms that the companies involved in the proposed Sanderson-Wayne merger are already implicated in several price-fixing lawsuits. In 2019, Sanderson Farms was subpoenaed by the DOJ for a price-fixing lawsuit with Tyson Foods Inc. and Pilgrim Pride Corp. In 2018, the company was involved in a lawsuit alleging that coordinated production cuts with other major poultry companies resulted in a “roughly 50% increase in the price of broiler chickens” and cheated consumers out of approximately $330 each year since 2008.
Not only has consolidation in the poultry industry exacerbated price-fixing schemes, it has allowed big poultry companies to exploit farmers — when many are already struggling to make ends meet. Large poultry firms have cut pay and eliminated competition so farmers and their workers are unable to get a better deal. One farmer observed that “the pay cut and the [Sanderson-Wayne] merger are inseparable—the only reason Sanderson proposed the cut was because the merger would leave growers with little choice but to accept the new terms.”
Warren, Jones, and their colleagues are calling on the DOJ to investigate how the proposed Sanderson-Wayne merger could violate antitrust laws, allow the newly integrated company to tighten its hold on the entire process of chicken farming, and further hurt farmers’ ability to maintain a livelihood.
The lawmakers continued: “The Administration should carefully scrutinize this merger and oppose it if it is found to reduce competition and have an adverse impact on consumers or farmers. In reviewing the prospective transaction, the DOJ must also consider the extensive history of price fixing in the poultry industry, particularly in light of past and ongoing litigation against Sanderson Farms and Wayne Farms…This mega merger, in a sector already plagued with consolidation and illegal behaviors that harm farmers and consumers alike, represents a new threat to building a competitive marketplace.”
In November 2021, Senator Warren initially raised concerns about the highly concentrated poultry industry when American consumers were hit with disproportionately high prices on poultry as companies enjoyed record profits, and rewarded executives and investors with bonuses and massive stock buybacks. Senator Warren also called on the DOJ just last week to aggressively pursue price fixing and ensure competitive markets to help bring down prices for consumers.
As a champion for American consumers and a secure and healthy economy, Senator Warren has continued oversight of corporations for their role in jacking up prices for consumers as Americans face record-high, economy-wide inflation.
- In January 13, 2022, Senator Warren questioned Federal Reserve nominee Lael Brainard about market concentration and price gouging driving inflation.
- At a hearing in January, Senator Warren pressed Fed Chair Jerome Powell on the role of corporate concentration in driving up prices for consumers during his renomination hearing to be Chair of the Board of Governors of the Federal Reserve System.
- In December 2021, Senator Warren called on Secretary Raimondo to use CHIPS for America Act funding to push back against industry consolidation in the semiconductor industry, address supply-chain resiliency, and bolster competitiveness in the industry. The global chip shortage has resulted in significant price increases for American families and contributed to the recent increases in inflation, as well as job losses due to auto plant shutdowns.
- That same month, Senator Warren slammed Hertz’s $2 billion dollar buyback plan, which would line the pockets of company executives and the private equity firm Apollo Global Management, while they raise rental car costs for consumers.
- In November 2021, Senator Warren called out the 11 energy companies that are inflating natural gas prices for consumers while reaping record profits.
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