Koch Foods, the fifth-largest poultry processor in the United States, has reached an agreement with the US Department of Justice (DOJ) to settle allegations of using illegal fees and penalties to hinder suppliers from selling to its competitors. The company was accused of imposing significant termination penalties on chicken farmers seeking to switch from working for Koch to another processor, reported Bloomberg.
The proposed settlement, currently awaiting court approval, will prohibit Koch Foods from engaging in harassment and penalization of bird suppliers. Additionally, the company will be required to reimburse expenses, fees, and penalties that were unlawfully imposed on these suppliers.
Deputy Assistant Attorney General Michael Kades, from the DOJ’s antitrust division, emphasized that antitrust and competition laws aim to protect growers’ rights to benefit from competition in terms of their products, services, and labor.
Koch Foods, a privately owned company with chicken-processing facilities in Alabama, Georgia, Mississippi, and Tennessee, allegedly imposed charges that amounted to more than half of many growers’ total annual income and, at times, exceeded their entire yearly earnings. The company was also accused of resorting to legal action, including lawsuits and threats, against numerous family farmers attempting to switch to a competing processor.
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