Pilgrim’s Pride to pay $110M in price fixing case

Pilgrim’s Pride, one of the nation’s largest poultry producers, said Wednesday that it would pay $110.5 million to settle federal charges it helped fix prices and then passed on higher costs for chicken to consumers, restaurants and supermarkets.

The company, based in Colorado, said it had agreed to the fine for “restraint of competition” in chicken sales in three contracts to a customer in the U.S., according to the statement.

The settlement, reached with the Justice Department, will need to be approved by the U.S. District Court for the District of Colorado.

The settlement comes after federal prosecutors boosted pressure on top industry executives.

In June, prosecutors indicted Jayson Penn, then president and CEO of Pilgrim’s Pride, and Roger Austin, its former vice president, on a price-fixing charge. Penn later left the company.

The executives, and two others from Claxton Poultry, were accused of colluding from at least 2012 to 2017 to fix prices and rig bids across the United States.

The Justice Department’s antitrust division confirmed it had entered into a plea agreement with Pilgrim’s Pride that was subject to court approval. It didn’t provide any details of the deal.

A settlement could help ease pressure on Pilgrim’s Pride, which is among a number of major poultry producers that have been contending with price-fixing allegations for years.

Pilgrim’s Pride said the agreement included a provision that the Justice Department would not bring anymore charges against the company on this matter. The company also noted it wouldn’t have to pay any restitution or be subject to monitoring under the agreement.

Last year, the Justice Department intervened in a lawsuit brought by major chicken customers against Pilgrim’s Pride, Tyson Foods and other producers.

The lawsuit said the companies made coordinated production cuts that led to significant increases in the price of broiler chicken, which makes up the vast majority of all the chicken meat sold in the United States. The customers noted that chicken prices were rising even while feed costs were falling.

The companies disputed the allegations.

In 2019, Pilgrim’s Pride reported $11.4 billion in sales. It said the $110.5 million fine would be recorded as a “miscellaneous expense” in its next quarterly report.