Pilgrim’s agrees to pay $75M settlement in antitrust case

Pilgrim’s Pride has reached a deal to pay $75 million to its buyers to settle claims that the company colluded with other poultry producers to fix chicken prices and rig bids.

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edwardolive | BigStockPhoto
edwardolive | BigStockPhoto

Pilgrim’s Pride has reached a deal to pay $75 million to its buyers to settle claims that the company colluded with other poultry producers to fix chicken prices and rig bids.

According to a Form 8-K filed with the U.S. Securities and Exchange Commission (SEC), Pilgrim’s Pride has entered into the agreement to settle all claims made by the putative Direct Purchaser Plaintiff Class (DPP Class) in the Broiler Chicken Antitrust Litigation.

The company said the agreement remains subject to court approval and does not settle claims made by plaintiffs outside of the DPP Class in the Broiler Antitrust Civil Litigation. Pilgrim’s Pride added that it is not admitting any guilt in the claims alleged in the case, but it does believe a settlement “was in the best interests of the company and its shareholders.”

The proposed settlement follows a plea agreement Pilgrim’s reached with the United States Department of Justice Antitrust Division in October 2020, regarding the federal agency’s investigation into the price-fixing allegations. In that plea agreement, which is subject to the approval of the United States District Court of Colorado, Pilgrim’s and the Antitrust Division agreed to a fine of more than $110.5 million for restraint of competition that affected three contracts for the sale of chicken products to one customer in the United States. 

Two former Pilgrim’s Pride CEOs – Bill Lovette and Jayson Penn -- and others involved with the company were among 10 people to be indicted on federal antitrust charges in 2020. Penn and Lovette both entered not guilty pleas.

Penn, the former president of Pilgrim’s USA who was chosen to succeed Lovette as CEO of Pilgrim’s Pride in March 2019, and Roger Austin, a former vice president of the company, were indicted in June 2020. Also indicted in June were  Mikell Fries and Scott Brady. Fries is president of Claxton Poultry and Brady is a vice president. Several months later, six additional poultry industry executives were indicted on federal antitrust charges, including Lovette, Timothy Mulrenia, William Kantola, Jimmie Little, Gary Roberts and Rickie Blake. Little’s LinkedIn profile listed him as a member of the Pilgrim’s Pride sales team, while Kantola’s profile listed him as senior vice president, Foodservice, of Pilgrim’s Pride.

Fabio Sandri replaced Penn as CEO of Pilgrim’s Pride on September 23, 2020.

The $75 million settlement payments will be reflected in Pilgrim's financial results for the fourth quarter of fiscal year 2020, which are expected to be released in the middle part of February, the SEC filing stated.

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