Tyson to pay $221.5 million to settle collusion case

Tyson Foods has agreed to pay $221.5 million to settle all class claims related to allegations that the company colluded with other leading U.S. poultry companies to drive up the price of chicken.

Roy Graber Headshot
(Tyson Foods)
(Tyson Foods)

Tyson Foods has agreed to pay $221.5 million to settle all class claims related to allegations that the company colluded with other leading U.S. poultry companies to drive up the price of chicken.

The company on January 12 informed WATTPoultry.com that it had reached an agreement in principle to settle the case, saying a settlement was “in the best interests of the company and its shareholders,” but the terms of the settlement were not yet disclosed.

However, a form 8-K filed with the U.S. Securities and Exchange Commission (SEC) revealed that it agreed to pay an aggregate amount of $221.5 million. Settlement terms were reached with the putative direct purchaser plaintiff class, the putative commercial and institutional indirect purchaser plaintive class and the putative end user plaintiff class, reads the form, which can be seen on the Tyson Foods Investor Relations webpage.

Tyson Foods said the settlement does not reflect an admission of any wrongdoing, but rather was a move to “avoid the uncertainty, risk, expense and distraction of protracted litigation.”

The settlement will be reflected in the company’s financial statements for the first quarter of the 2021 fiscal year, which are expected to be released in February.

In 2020, 10 past and present poultry industry executives were indicted on federal antitrust charges related to claims of collusion. Two of those executives were former chief executive officers with Pilgrim’s Pride.

Pilgrim’s Pride earlier announced a settlement in the suit, in which the company agreed to pay $75 million. Like Tyson Foods, Pilgrim’s Pride said the settlement did not reflect an admission of wrongdoing, but that it was “in the best interest of the company and its shareholders.”

That settlement will be reflected in the financial results of the fourth quarter of Pilgrim’s Pride’s 2020 fiscal year. Those results are also expected to be released in February.

Tyson Foods and Pilgrim’s Pride are respectively the largest and second largest poultry companies in the United States.

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