Tyson clear of collusion charges
Tyson Foods won a victory in the ongoing tumult over price-fixing allegations in the chicken industry.
The Springdale, Ark., company said the Securities and Exchange Commission won’t recommend enforcement action against it.
Tyson, the biggest chicken producer in the US, received a letter from the SEC dated Aug. 22 saying that the agency has completed its investigation into allegations contained in antitrust litigation involving broiler chickens, it said in a statement.
Accusations of collusion have dogged the American chicken industry over the past year as Tyson, led by Chief Executive Donnie Smith, and its largest competitors have been named as defendants in a series of lawsuits in recent months that claim producers colluded starting in 2008 to drive prices higher, allegations denied by the companies.
Tyson shares were off 61 cents on Friday, to $63.23. The shares are up 2.9 percent this year.
Rival producer Pilgrim’s Pride saw its shares dip 19 cents, to $28.40. They are up 50 percent this year.
A third chicken producer, Sanderson Farms, gained 3.3 percent on Friday, to $141.24, leaving it up 50 percent for the year.
Over several decades, the US industry has transformed itself from being comprised mostly of family owned farms into a heavily consolidated sector controlled by several multibillion-dollar companies.
Per-capita chicken consumption in the US has more than doubled in 40 years. Consumers spent about $90 billion on the meat products last year.
As those companies’ market share and power have grown, they have drawn scrutiny for their production practices, such as their use of contract farming to raise birds for slaughter.
There have been some changes to the chicken industry amid the legal complaints.
The Georgia Department of Agriculture, which gathered and disseminated the benchmark Georgia Dock prices that are the focus of some of those complaints, discontinued its widely used pricing index in December.