Litigation Funding for the Restaurant Industry

Recently, Conagra Brands and Kraft Heinz sued Tyson Foods and other chicken suppliers for allegedly conspiring to inflate prices. That comes on the back of a large antitrust claim agains the pork industry, alleging price collusion since 2009. All of this has a major impact not just on the food processing and packaging industries, but on the restaurant industry as well – given that a full 1/3 of all restaurant costs are related to food inputs. With slim margins and a true David v. Goliath dynamic, the restaurant industry is ripe for litigation funding.

As reported in Modern Restaurant Magazine, the restaurant industry is one where tight margins abound. Any excess costs must be passed onto the consumer, which then impacts sales and revenue. So when large food manufacturers allegedly conspire to inflate prices, restaurants feel the heat more than anybody.

Since many restaurants don’t have the capital to pursue legal claims, it can be difficult to assert their rights. Additionally, many restaurants want to continue ongoing relationships with their suppliers, hence they are loathe to sue – especially when they don’t necessarily have the capital to back up a long, arduous legal claim.

With access-to-justice such an issue in the restaurant industry, it makes sense for litigation funders to fill the gap. Any industry with limited (or non-existent) legal budgets can benefit from litigation funding, and the restaurant industry is in exactly that position. Asserting one’s rights against suppliers and vendor is a tough call for any business, especially one as precariously positioned as a restaurant. Partnering with funders empowers these businesses by providing them the leverage they need to take on multi-billion dollar corporations who allegedly conspired to increase their costs.