Afternoon Coffee: Chick-fil-A sues chicken suppliers for price fixing; World’s largest rubber glove supplier temporarily shuts down; Airlines face positive outcomes with vaccine rollout

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Chick-fil-A Inc. sued its major poultry suppliers, accusing them of price-fixing which the Atlanta-based food chain said led to inflated prices for billions of dollars of its chicken purchases, according to the Wall Street Journal.

The fast-food giant alleged in a lawsuit filed on Friday in a federal court in Illinois that top chicken suppliers like Tyson Foods Inc., Pilgrim’s Pride Corp., Sanderson Farms Inc. and Perdue Farms Inc. coordinated pricing for meat suppliers and collectively reduced production to force higher prices. Chick-fil-A seeks unspecified damages and to recoup legal fees, the article said.

In the complaint, Chick-fil-A said it “purchased billions of dollars’ worth of broiler chicken from defendants and/or their co-conspirators throughout the relevant period at prices that were artificially inflated,” the WSJ reported.

World’s largest supplier of rubber gloves shut downs temporarily for COVID-19 breakout

More supply chain disruptions are likely to be seen in rubber gloves after Malaysia’s Top Glove Corp., the world’s largest supplier of rubber gloves, temporarily shut down production because of a COVID-19 outbreak, according to the Associated Press.

More than 2,000 workers at its factories were infected by the coronavirus, leading the company to stop production at 16 factories with its remaining 12 factories in the area operating at much reduced capacities. Top Glove said it produces about 90 billion rubber gloves a year, which is about one-quarter of the world’s supply, and exports to 195 countries. The article said it has seen profits soar during the COVID-19 pandemic because of rising demand for rubber gloves and other personal protective equipment.

“We expect delays in some deliveries by about two to four weeks, as well as a longer lead time for orders, and estimate a possible 3% impact on projected annual sales for financial year 2021,” Top Glove said in a statement, according to the Associated Press. “To minimize the impact on our customers, we are allocating sales orders to unaffected factories and rescheduling deliveries where possible.”

Airlines can see positive outcomes with vaccine rollout

One potential bright spot for the battered airline industry is the shipping for mass rollout for vaccines, according to Reuters.

Airlines across the world are prepping for a key role in the distribution of vaccines, a promise of an immediate boost for the sector. Freight specialists and large airlines with cargo arms — like Germany’s Lufthansa, Air France-KLM and Hong Kong’s Cathay Pacific — are set to have major roles and are often sitting under contracts for forwarders and integrators like UPS, Fedex and DHL, the article said.

Other major airlines are set to help by leveraging their vast connecting hubs. While the earnings potential is “difficult to quantify,” Cathay commercial chief Ronald Lam told analysts recently, “there will be a positive impact either directly through vaccine transportation or the surge in overall cargo demand,” Reuters said.

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