WASHINGTON (Reuters) – Senator Elizabeth Warren, backed by some dozen other U.S. lawmakers, told the Justice Department that a plan to merge chicken producer Sanderson Farms with smaller rival Wayne Farms “raises significant antitrust concerns.”
Commodities trader Cargill Inc and Continental Grain Co announced in August that they would buy Sanderson Farms, the third largest chicken producer, and combine it with Continental’s Wayne in a deal worth some $4.53 billion.
In the letter, sent on Wednesday, Warren, Representative Mondaire Jones and others said the poultry industry has a history of colluding to fix prices for consumers.
They said that because of consolidation among chicken producers which do the slaughtering, farmers who actually raise chickens may have just one or two producers in a particular region to do business with. The pay of a typical chicken farmer fell more than 6% between 1988 and 2015, Warren said.
“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 agricultural industry,” the lawmakers wrote. “We respectfully urge the DOJ to scrutinize the proposed Sanderson-Wayne transaction to determine whether it violates the antitrust laws, and the DOJ should oppose the merger if it does.”
Cargill, Continental Grain and Sanderson Farms did not immediately respond to requests for comment. The companies have said that Sanderson and Wayne are relatively small players among chicken producers and serve different customers.
In addition to Warren and Jones, among those signing the letter were Democratic Senators Cory Booker and Richard Blumenthal, independent Senator Bernie Sanders and Democratic Representatives David Cicilline, Hank Johnson and Katie Porter.
Warren in November had called on the Justice Department to investigate the impact of price-fixing and consolidation in the poultry sector on consumers and farmers. She had also urged the department’s Antitrust Division to review “with suspicion” any large mergers in the industry after Cargill and Continental in August announced the Sanderson deal.
(Reporting by Diane Bartz; Editing by Leslie Adler)
