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Pilgrim’s Pride to Pay $110 Million to Settle Charges of Fixing Chicken Prices
The Justice Department said the company had helped fix the price of chicken and passed the cost to consumers.
Eshe Nelson and
Pilgrim’s Pride, one of the largest poultry producers in the United States, said on Wednesday that it would pay $110.5 million to settle federal charges that it had 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 United States, according to the statement. The settlement, reached with the Department of Justice, will need to be approved by the U.S. District Court for the District of Colorado.
The settlement comes after federal prosecutors ramped up pressure on top industry executives. In June, prosecutors indicted Jayson Penn, who was president and chief executive of Pilgrim’s Pride, and Roger Austin, its former vice president, on a price-fixing charge. Mr. 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 that it had entered into a plea agreement with Pilgrim’s Pride that was subject to court approval. It did not 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 any more charges against the company on this matter. The company also noted that it would not 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 had 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.
Eshe Nelson is a reporter in London, where she writes about companies, the British economy and finance. More about Eshe Nelson
Carlos Tejada is based in Hong Kong, and he oversees coverage of Asian business and economics. He previously worked at The Wall Street Journal, where he was a reporter and editor for two decades. More about Carlos Tejada
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