Last year, just 24 months after it began its poultry experiment, Costco was the target of an undercover investigation by Mercy for Animals, which showed a Nebraska barn crowded with birds, some with open wounds, sitting in their own droppings because they were too heavy to walk. The investigation led to a Nicholas Kristof opinion piece in the New York Times. This also led to new stories in Nebraska, where Costco built a $450 million poultry complex in Fremont, as well as a petition to encourage the company to adopt better chicken welfare practices.
What it didn’t achieve, according to a complaint filed this month in Seattle, changes were made to Costco and its poultry farms, which plaintiffs say still violate animal welfare laws in Nebraska and Iowa. They are suing Costco’s officers and directors for breach of fiduciary duty, which they say “could expose the company to significant liability.” The plaintiffs are represented by two firms specializing in animal welfare and cruelty laws.
Plaintiffs Krystil Smith and Tyler Lobdell are shareholders of Costco. They accused Costco executives of being addicted to cheap poultry — to the detriment of the company, shareholders and slaughtered animals in the name of the wildly popular Kirkland Signature Roast Chicken, which sells for $4.99 a poultry.
“If Costco continues to unlawfully abuse chickens, it risks undermining its long-term and successful traffic generation strategy,” the lawsuit states. “As more and more consumers learn of the mistreatment of Costco chickens, the benefits gained from using rotisserie chickens at a loss to drive customer traffic and purchases . . . will disappear or drastically diminish because preferences consumers not to buy illegally or unethically produced products will outweigh the allure of “cheap” chicken.
Richard Galanti, Costco’s chief financial officer and executive vice president, said by email the company would have no comment. Galanti is one of 17 named defendants, which also include Ron Vachris, president and chief operating officer; W. Craig Jelinek, Managing Director; and Hamilton E. Jamesa billionaire businessman who chairs Costco’s board of directors.
In an interview, Smith said that as a Costco shareholder, she felt “complicit” in the abuse of farm animals after watching the Mercy for Animals video. She says she has no particular affinity for animals, although she has been a vegan for 15 years and studied animal rights in law school.
“But I don’t think you need to have a special affinity for anything to not hurt them, or certainly to uphold the law,” Smith, a practicing attorney in Maryland, told Reuters. Washington Post.
Lincoln Premium Poultry was established in 2016 to serve as Costco’s vertically integrated poultry operations management company, whose sole purpose is to supply chickens to the retail giant. The main Fremont complex includes a 400,000 square foot hatchery, feed mill and processing plant with a controlled atmosphere stunning system, which uses gas to incapacitate birds before they are slaughtered. Animal behaviorist Temple Grandin has approved gas method as more humane to birds than electrical stunning.
Mercy for Animals’ investigation did not target the Fremont compound, but focused on an unnamed barn, one of hundreds in Nebraska and Iowa operated by farmers under contract with Costco to raise chickens for the retailer. According to Smith and Lobdell’s complaint, Costco and Lincoln Premium Poultry recruited approximately 120 people to become contract producers; their farms sometimes faced strong opposition from neighbors who didn’t want the operations (expected to raise up to 190,000 chickens every six weeks) to dirty their air and water.
“Most people hired by Costco to raise chickens had never raised chickens before they started working with Costco,” the lawsuit alleges. “As a result, Costco is responsible for educating these producers on how to raise chickens and care for the animals, and for establishing the animal welfare standards that these producers follow.”
In these contract barns, the plaintiffs say, farmers raise tens of thousands of chickens “which are bred to grow abnormally fast”, resulting in health issues, such as dead muscle tissue, as the birds have trouble circulating blood and oxygen to their extended body. . Chickens can be so heavy that when they fall they cannot get up. Others may be too heavy to move, so they sit in one spot, shedding feathers and exposing their skin to the dirty barn floor. This can lead to ammonia burns.
These immobile chickens, according to the complaint, may not have access to food and water. Others may be too weak or injured to feed. Costco, according to the plaintiffs, does not provide the birds with individualized veterinary care.
On these farms, according to the lawsuit, “Disabled birds slowly die of starvation, thirst, injury and disease. Costco’s directors and officers initiate and are aware of these illegal practices; and chose to ignore the red flags clearly illuminating Costco’s illegal behavior.
These practices, argue Smith and Lobdell, violate the Nebraska Farm Animal Welfare Act and the Iowa Livestock Neglect Law. The plaintiffs devote a significant portion of their 50-page lawsuit to explaining how Costco executives and directors knew about the alleged animal welfare violations — but ignored them.
The lawsuit notes that Costco released a statement in September regarding the welfare of his chickens. The company defended its operations, including the practice of raising fast-growing birds, and pointed out that ‘the minimum standards followed in these poultry houses are based on those developed by the National Chicken Council’.
Mercy for Animals wants more Costco. The organization, which aims to end factory animal farming, wants the retailer to join more than 200 companies that have already signed the Better Chicken Commitment, which calls for higher animal welfare and processing standards. Popeyes, Chipotle, Subway, Shake Shack, Burger King and other chains have signed up, but according to consumer reportsCostco did not.
Smith and Lobdell allege Costco executives can’t let go of their $4.99 chicken, no matter what it means for the company’s reputation or the welfare of the birds. They claim the retailer sells over 100 million of these rotisserie birds each year, increasing foot traffic and profits along the way.
Smith said that as a shareholder she was attracted to The Values Professed by Costco, including those around animal welfare. She says it doesn’t matter if improvements in animal welfare cause Costco to raise the price of its rotisserie chicken, which has remained at $4.99 for more than a decade. This is the law.
“Costco knows the law is being broken in this case. They need to correct their course,” she said. “No one is above the law”