|February 18, 2004,
just-food.com: An Alabama jury has found Tyson
subsidiary IBP guilty of price fixing and recommended
the meat processing giant pay out $1.28bn in damages.
The complaint, which was filed in 1996, had originally
been brought against IBP by a small group of cattle
producers who alleged the company's cattle buying practices
allowed it to "manipulate and control cattle prices."
IBP, now known as Tyson Fresh Meats, was then bought
out by Tyson Foods who assumed responsibility for the
The lawsuit accused Tyson of lowering cattle prices
by entering into supply contracts with big producers,
rather than buying cattle on the open “cash”
market. The plaintiffs said Tyson relied on its supply
contracts when prices were high, but dealt in the open
market when prices were low, thereby forcing prices
down, reported the Financial Times.
Tyson called the verdict “a disappointment,”
and said it would ask the judge to set aside the verdict,
and if he does not do so, the company intends to appeal
against the jury’s decision.
The Alabama jury pointed to $1.28bn in damages, which
Tyson said overstates its potential liability.
“While the jury rendered an "advisory"
number on damages which we believe overstates our potential
liability, it is not a damage award,” Tyson said.
The company said it does not expect the jury decision
to materially impair its liquidity or affect operations.
Separately, Tyson announced it is to reduce its workforce
by around 5% and invest in automation.