Pilgrim’s Pride pleads guilty to price fixing charges

Pilgrim’s Pride Corporation pleaded guilty to charges that it participated in a conspiracy to fix prices and rig bids for broiler chicken products.

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BCFC | Bigstockphoto.com
BCFC | Bigstockphoto.com

Pilgrim‚Äôs Pride Corp. pleaded guilty to charges that it participated in a conspiracy to fix prices and rig bids for broiler chicken products.

A plea agreement was reached in the U.S. District Court in Denver, in which Pilgrim’s admitted to participating in a conspiracy to suppress and eliminate competition for sales of broiler products in the United States that affected at least $361 million in Pilgrim’s Pride sales. The plea agreement stated that the price fixing activity began as early as 2012 and continued until at least 2017, according to a press release from the U.S. Department of Justice (DOJ).

As a result of the guilty plea, Pilgrim’s Pride must now pay criminal fines amounting to $107.9 million.

‚ÄúToday‚Äôs plea is another example of the FBI‚Äôs ongoing work to eliminate bid rigging and price fixing and hold those conducting these activities accountable for their actions,‚ÄĚ Steven M. D‚ÄôAntuono, assistant director in charge of the FBI Washington Field Office, said in the press release. ‚ÄúThese criminal acts cheat American workers and consumers while harming competitive markets. This ongoing investigation has yielded charges against 10 individuals for their efforts to illegally manipulate broiler chicken prices, and the FBI is committed to continuing this important work alongside the Department of Justice and our partners.‚ÄĚ

‚ÄúThis investigation demonstrates the government‚Äôs resolve to protect the integrity of free and open market competition,‚ÄĚ said Peggy E. Gustafson, Inspector General of the Department of Commerce. ‚ÄúWhen competitor companies conspire to set prices that benefit themselves, American consumers are cheated. We will continue to work with our law enforcement partners to pursue such illegal activity and ensure perpetrators are held accountable. We greatly appreciate the efforts of the Department of Justice, FBI and USDA OIG on this investigation.‚ÄĚ

Pilgrim’s guilty plea comes after a January announcement that the company reached a deal to pay $75 million to its buyers to settle claims that it conspired with other poultry producers to fix chicken prices and rig bids. That deal was announced in a form 8-K filed with the U.S. Securities and Exchange Commission (SEC). A copy of that form can be seen on the Pilgrim’s Pride Investor Relations webpage.

According to the DOJ, Pilgrim’s Pride is the first poultry company to enter a guilty plea, although executives affiliated with other poultry companies have also been charged in the investigation.

Among those charged with affiliations with Pilgrim’s Pride were Bill Lovette and Jayson Penn, both former CEOs; Roger Austin, a former vice president of Pilgrim’s Pride; Jimmie Little, sales team member; and William Kantola, senior vice president of foodservice.

Penn succeeded Lovette as CEO in March 2019. In September 2020, Pilgrim’s announced that Penn was no longer with the company, and that Chief Financial Officer Fabio Sandri had been promoted to the CEO position.

Mikel Fries, president of Claxton Poultry, and Scott Brady, vice president of Claxton Poultry, were also charged. While not all of the 10 people charged were identified with specific company affiliations, views of their LinkedIn profiles showed past and present affiliations with companies including Tyson Foods and Perdue Farms.

Tyson Foods also in January announced an agreement to settle all class claims related to allegations that they company colluded with other leading poultry companies to drive up the price of chicken. 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.

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