Tyson, based in Springdale, Ark., will have to remove posters and brochures from 8,500 grocery stores nationwide.
"We're disappointed the motion for a stay has been denied and are evaluating our legal options," said Gary Mickelson, a spokesman for Tyson Foods. "We continue to believe we have acted responsibly in the way we have labeled and marketed our products and intend to stand our ground."
The ruling is a setback for Tyson in its ongoing battle with two of its competitors Sanderson Farms, based in Laurel, Miss., and Perdue Farms, based in Salisbury, Md. The two companies jointly sought an injunction to stop Tyson's ad campaign, arguing the "raised without antibiotics" claim misleads consumers by making it appear Tyson's chicken is safer or more healthful.
Sanderson and Perdue initially based their legal challenge on Tyson's practice of feeding chickens ionophores, an antibiotic used only in animals raised for food. Sanderson and Perdue also use ionophores.
Then during trial in federal court in Baltimore, Tyson officials acknowledged they also inject eggs several days before they hatch with antibiotics that are approved for use in humans. Dave Hogberg, Tyson's senior vice president for consumer products, said it is a common industry practice.
Hogberg said injecting eggs with antibiotics did not undermine the "raised without antibiotic" label because the term "raised" is understood to cover the period that begins with hatching.
More consumers are becoming concerned about the use of antibiotics in poultry, swine and cattle because they and many public health experts think that it contributes to the rise of antibiotic-resistant viruses in humans.
The dispute between Tyson and its competitors began last year, when Tyson announced it would raise its chickens without antibiotics, as part of a larger effort to relaunch its brand. It sought approval from the U.S. Department of Agriculture for the use of the label "raised without antibiotics." USDA initially approved the language, then last fall reversed itself, saying it had made a mistake.
Tyson came up with a new label that said, "raised without antibiotics that impact antibiotic resistance in humans" that the USDA greenlighted.
The resulting advertising campaign proved a huge success. In a February conference call, Tyson chief executive Richard Bond told analysts the company has had double-digit increases in sales of fresh chicken raised without antibiotics, totaling an additional 70 million pounds of chicken a year.
But Tyson's success came at a high cost for its competitors, said Randall K. Miller, a partner at Arnold and Porter and lead counsel for Sanderson and Perdue. The companies sued in January seeking to force Tyson to stop making claims that its products were antibiotic free.
Sanderson blamed Tyson's ad campaign for the loss of a $4 million account, and Perdue blamed it for a $10 million loss in revenue. Greater damage, however, was done to the companies' reputations, Miller said. In seeking an injunction against Tyson's ad campaign, Sanderson and Perdue argued that Tyson's "raised without antibiotics" claim caused irreparable harm by implying its competitors' products contained antibiotics or dangerous additives and were therefore less safe.
Separately, Sanderson and Perdue also petitioned USDA to rescind its approval of Tyson's "raised without the use of antibiotics that impact antibiotic resistance in humans" label, citing both the use of antibiotics in unhatched eggs and in chicken feed.
In an April 30 letter to Miller regarding the companies' petition, the USDA said the egg injecting practice was "of serious concern."
"Rather than discuss any specifics to this particular case, [the Food Safety and Inspection Service of USDA] has requested additional information to help us determine what the facts are in this situation," FSIS spokeswoman Amanda Eamich said.
Hogberg said Tyson has been forthright with regulators. He said he hopes Tyson and USDA can resolve the matter quickly.
"As we did in working with them on the qualified claim last fall . . . we would hope the process would be similar so we can preserve this benefit for the mainstream consumer," he said.
