Pilgrim’s Pride to pay $110M fine
Pilgrim’s Pride Corp. has reached a plea agreement with the U. S. government over charges of pricefixing in the chicken industry.
Under the agreement, Pilgrim’s Pride would pay a fine of $110.5 million as a penalty for restraining competition in three separate contracts with a U.S. customer. In exchange, the U. S. Department of Justice would not bring further charges against Pilgrim’s Pride or recommend a monitor or any probationary period.
The agreement must still be approved by the U.S. District Court in Colorado. Pilgrim’s Pride had been scheduled to face price-fixing charges in federal court Thursday, according to court filings.
“Pilgrim’s is committed to fair and honest competition in compliance with U.S. antitrust laws,” Pilgrim’s CEO Fabio Sandri said.
The Department of Justice confirmed the plea deal but said it won’t comment until the agreement is filed with the court.
The agreement does not appear to impact ongoing cases against former Pilgrim’s Pride executives.
In June, the government charged two executives — Pilgrim’s Price President and CEO Jayson Penn and former Vice President Roger Austin — with conspiring to fix prices and rig bids for broiler chickens from at least 2012 to 2017. Both have pleaded not guilty. Penn left Pilgrim’s Pride last month.
The charges were among the first in a long-running government investigation into price-fixing in the poultry industry. Last week, a federal grand jury in Colorado indicted six more employees at chicken suppliers on price- fixing charges. Ten people have been charged in all.
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 colluded to fix the prices of broiler chickens, which make 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.
One of Pilgrim’s Pride’s competitors, Springdale, Arkansas- based Tyson Foods Inc., said in June that it was cooperating with the Justice Department’s investigation. Tyson said it received a grand jury subpoena in April 2019 and shared documents with the government.
Greeley, Colorado-based Pilgrim’s Pride is a division of JBS USA, the U. S. subsidiary of Brazilian meat production giant JBS SA. Pilgrim’s Pride has more than 54,000 employees and 36 production facilities in the U.S. and abroad, including a chicken processing plant and a chicken packaging operation, both in downtown Chattanooga that collectively employ more than 1,200 workers.
The company says it processes one of every five chickens in the U.S. 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.
Nearly 40 lawsuits have been filed by grocers, restaurants and others alleging price fixing in the chicken industry.
One lawsuit, filed by New York- based Maplevale Farms, said big chicken producers shared information through a third- party data firm and restricted supply by destroying breeder hens on several occasions.