Source:  Tom Johnston, MEATINGPLACE, 6/24/11

A settlement with the Department of Justice will require George’s Inc. to expand the Harrisonburg, Va., complex it acquired from Tyson Foods in order to optimize business opportunities for poultry producers in the Shenandoah Valley.

The feds filed a proposed settlement Thursday in the U.S. District Court for the Western District of Virginia. If approved, the deal would resolve the civil antitrust lawsuit the DOJ filed against George’s on May 10.
“The proposed settlement enhances the competitive viability and increases the production of the Harrisonburg poultry processing plant, which translates into more opportunities to grow and process poultry,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division, in a news release.  “This resolution not only benefits poultry growers, but also the Shenandoah Valley community.”

The justice department feared the acquisition, closed in early May, would have reduced to two (George’s and Pilgrim’s Pride) the number of companies with which poultry growers could do business in the region, and thereby depress the prices they would receive from the processors.

The settlement requires George’s to make a number of capital improvements, including the installation of a special freezer and deboning equipment, in order to produce a variety of products at both its Harrisonburg, Va., and Edinburg, Va., facilities.

“As a result of these improvements, George’s will have the incentive and ability to increase local poultry production, thereby increasing the demand for grower services and averting the likely adverse competitive effects arising from the acquisition,” the DOJ’s statement says.

Springdale, Ark.-based George’s, the 11th largest U.S. chicken processor, had said it planned a gradual increase in production at the Harrisonburg complex.

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