What’s in a name at Tyson Foods?
Not quite a year ago, Tyson (TSN) was touting its “100% Antibiotic Free” chicken, with CEO Richard Bond describing it as a “game changer”. Sales were strong, with the company noting in this 8K filed last September that there was “growing consumer interest in all natural foods”. The higher margins on the chicken also helped. For the second quarter ended March 28, chicken prices climbed by over 7%, even though volume was down.
But late yesterday, Tyson issued this release, which said the company was voluntarily withdrawing the label “due to uncertainty and controversy” over the label. “We still support the idea of marketing chicken raised without antibiotics because we know it’s what most consumers want,” said Dave Hogberg, senior vice president of Consumer Products for Tyson Foods.
According to this AP story the company spent $16 million promoting the brand and some undisclosed additional money fighting a lawsuit filed by Sanderson Farms (SAFM) and the privately-held Perdue, both of which sued over the new labeling.
What’s also interesting here, as we first footnoted last November, is how the whole controversy is strangely missing from any of Tyson’s filings. How this doesn’t pass the 8K sniff-test seems pretty surprising. Meanwhile, a quick skim of the USDA website shows that a paralegal from Arnold & Porter has been requesting USDA documents on Tyson’s labeling.