Popular Media

Predatory Output Reduction?

The conventional predation claim involves a monopolist reducing price and increasing output.  Here’s a creative theory involving a claim that a decision to close down factories injures competition:

A federal judge in Texas is hearing testimony from farmers who contend that poultry producer Pilgrim’s Pride closed plants and ran them out of business to manipulate commodity chicken prices.

Their lawsuit alleges violations of a Depression-era antitrust law enacted to limit big meatpackers’ power over farmers and ranchers.

Bob Depper is one of the attorneys for the 275 farmers from several states. He says the trial in East Texas could last weeks or months. Friday was the second day of testimony.

The lawsuit is being tried before a judge rather than a jury in Marshall, about 175 miles east of Fort Worth.

Pilgrim’s Pride declined to comment on the lawsuit. It has said it closed some plants to save costs before emerging from Chapter 11 bankruptcy protection in 2009.

HT: Businessweek.  More background on the plant closings here.

Filed under: antitrust