Meat sweats... Planet Earth's 2nd biggest "processor of chicken, pork, and beef" (not a fun term here) enjoyed a healthy quarter — Tyson's sales rose 8% and profits surged 25%, so the stock jumped 5%. One issue: Tyson was also accused of a giant meat price conspiracy that may have affected your summer BBQ game.
1 serving of subpoena from the Justice Department... Apparently some of Tyson's biggest clients have had some concerns about chicken prices — they rose 11% from 2012 to 2018. Walmart makes up 17% of Tyson's revenues and bolognese legend Olive Garden is another big buyer — but they (and others) got skeptical.
- The accusation: Tyson and other chicken producers colluded (which is illegal) to prop up prices by limiting chicken breeding (which is strange). Tyson denies it.
- The culprits: Tyson, Perdue, Pilgrim's Pride, and other chicken producers.
- The subpoena: The Justice Department is forcing Tyson to hand over any “documents and information related to the chicken industry.” Sounds official.
Cartels are hard... That's when companies get together, wink a few times, and make moves that keep prices artificially high. It's anti-competitive, anti-consumer, and simply illegal. But it's also challenging to pull off, since it requires the backdoor coordination of a few major players. That's why the most famous cartel isn't even in the US — it's OPEC, the international organization of 14 oil countries that control oil supplies so they can control oil prices.