Tyson Foods has agreed to a settlement in a class action accusing the food giant of falsely claiming that its chickens were raised without antibiotics.
Under the proposed settlement, Tyson will pay consumers up to $5 million, with each class member eligible to receive up to $50. If there is money left over, Tyson will donate the difference to food banks. The agreement also provides for $3 million in attorneys' fees.
The suit stemmed from Tyson's claim, beginning in 2007, that its chickens were raised without antibiotics. In June 2008, the U.S. Department of Agriculture (USDA), which must approve such claims, rescinded its approval for Tyson's campaign and ordered the label removed from the company's products. In a statement, the USDA said that it found that [Tyson] routinely used the antibiotic Gentamicin to prevent illness and death in chicks and ordered Tyson to stop using the qualified raised without antibiotics labels by June 18.
The order came after two major competitors Sanderson and Perdue sued Tyson in federal court, arguing that the company's claims had cost them $4 million and $11 million in lost sales, respectively.
The companies claimed that consumers were scared off of their products, believing that they contained antibiotics that could decrease drug resistance in humans. While experts believe that some antibiotics have caused the emergence of superbugs immune to drug treatment, the antibiotic commonly given to chickens ionophores poses no such danger.
Tyson did, however, inject eggs with a vaccine that shares an ingredient with human treatments. Tyson insisted that its raised without antibiotics claim was still technically true, since birds aren't raised until after they're hatched.
The settlement is still awaiting approval from a federal court in Baltimore. Consumers who bought Tyson poultry and saved their receipts can collect up to $50; those without receipts stand to gain at most $10.
James Pizzirusso, one of the plaintiffs' attorneys, told ABC that the settlement puts a lot of value in the hands of consumers and that class members stand to get a large chunk of the settlement pie. If you bought this product and bought at least $10 worth, all you have to do is fill out a form to get $10, Pizzirusso said.
Tyson also professes to be satisfied with the deal. We're pleased a settlement has been reached and will now wait for the court to review and, we hope, approve the agreement, reads a statement from Tyson spokesman Gary Mickelson. While we believe our company acted appropriately, we also believe it makes sense for us to resolve this legal matter and move on.
The entire affair has to have been a headache for the world's largest meat producer. The company spent around $70 million on the ad campaign and that was before the litigation started.