The U.S. Department of Agriculture (USDA) entered into a stipulation agreement with Hain Celestial for the company’s alleged violations of Section 410 of the Packers and Stockyards (P&S) Act.
The USDA Agricultural Marketing Service (AMS) alleged that between November 2017 and March 2018, Hain Celestial failed to pay poultry growers in full due to changes in contract payment rates which occurred after the placement of poultry on poultry growers’ farms. The USDA further alleged that the total amount underpaid to poultry growers was approximately $536,695.
Hain Celestial neither admits nor denies the allegations. However, to amicably resolve this matter, the company agreed to pay the settlement amount in the form of restitution to each poultry grower within sixty 60 days from the date of the stipulation agreement, which was signed on February 24. In addition, under the terms of the stipulation agreement, Hain Celestial waived its rights to a hearing and will pay a total penalty of $50,000.
Hain Celestial, a diversified natural and organic products business, was the parent company of Hain Pure Protein, which produced chicken and turkey products under the FreeBird, Plainville Farms and Empire Kosher brands. The company completed the divestiture of its Hain Pure Protein assets in June 2019.
It sold the Plainville Farms turkey operations in February 2019 to a Delaware limited liability company, Plainville Brands LLC, which was formed by a group of private investors. Terms of that transaction were not disclosed. Several months later, Hain Celestial announced it had sold the rest of the Hain Pure Protein assets to Aterian Investment Partners for a price of $80 million.
Section 410 of the P&S Act requires subject entities to issue the full payment for poultry obtained under a poultry growing arrangement by the close of the 15th day following the week in which poultry was slaughtered. Failure to timely pay for purchases and failure to issue the full payment for purchases are violations of Section 410 of the P&S Act.
According to the USDA, the P&S Act previously authorized the U.S. Secretary of Agriculture to assess civil penalties up to $80,000 per poultry payment violation against any person after notice and opportunity for hearing on the record. The civil penalty increased to $81,633 in March 2018. USDA may offer alleged violators the option of waiving their right to a hearing and entering into a stipulation agreement to quickly resolve alleged violations.
The P&S Act is designed to be a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat and poultry industries.