But Costco now faces a lawsuit from two shareholders claiming that the company and its top executives violated animal welfare laws and, in the process, broke their fiduciary duties. The lawsuit calls into question the lengths Costco has gone to keep its key item cheap.
Costco did not immediately respond to request for comment on the lawsuit.
As part of the operation, Costco recruited farmers in the area to raise broilers to be delivered to the Nebraska processing facility.
But the suit alleges that Costco intentionally breeds these broilers too large in to stand on their own in factory farms and the “disabled birds slowly die from hunger, injury and illness.”
It follows allegations from another animal rights group about Costco’s treatment of its chickens.
But Costco’s practices could hurt demand for rotisserie chickens, the lawsuit claims, and harm its corporate reputation.
“As more consumers learn of the mistreatment of Costco chickens, the benefits reaped using loss-leading rotisserie chickens to drive customer traffic and purchases . . . will vanish or greatly diminish because consumer preferences to not buy products made illegally or unethically will trump the lure of a ‘cheap’ chicken.”