Claxton Poultry indicted on price fixing charges

A federal grand jury returned an indictment, charging Norman W. Fries Inc., doing business as Claxton Poultry Farms, with participation in a nationwide conspiracy to fix prices and rig bids for broiler chicken products, the U.S. Department of Justice (DOJ) announced on May 20.

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BCFC | Bigstockphoto.com
BCFC | Bigstockphoto.com

A federal grand jury returned an indictment, charging Norman W. Fries Inc., doing business as Claxton Poultry Farms, with participation in a nationwide conspiracy to fix prices and rig bids for broiler chicken products, the U.S. Department of Justice (DOJ) announced on May 20.

Court documents assert that Claxton Poultry and co-conspirators, including company President Mikell Fries and Vice President Scott Brady, conspired to suppress and eliminate competition for sales of broiler chicken products sold to grocers and restaurants.

Fries and Brady were indicted in June 2020 for their alleged roles, as were then-Pilgrim’s Pride CEO Jayson Penn and former Pilgrim’s vice president Roger Austin. Six more poultry industry executives were indicted on similar charges in October 2020.

The company has been charged with a violation of the Sherman Antitrust Act. If convicted, Claxton Poultry faces a statutory maximum fine for corporations of $100 million. The maximum fine can be increased to twice the gain derived from the crime or twice the loss suffered by victims, if either of those amounts is greater than the statutory maximum fine.

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors, the DOJ stated.

“As this charge shows, we will not hesitate to prosecute crimes designed to put money in corporate coffers and line executives’ pockets at the expense of everyday Americans, including the hundreds of millions of us who rely on chicken to be an affordable staple food,” Acting Assistant Attorney General Richard A. Powers of the DOJ antitrust division said in a press release. “Alongside our valued law enforcement partners and colleagues at the District of Colorado U.S. Attorney’s Office, we will not stop until integrity is restored to this vital market and all wrongdoers are held to account.”

At the time Fries and Brady were indicted, Claxton Poultry issued the following statement: “The allegations attributed to our company are without merit and we intend to vigorously defend our company and its good name as this process moves forward. We will not comment further on the allegations other than to say that since our small start in 1949, we have adhered to the highest standards of food quality, professionalism, integrity and good faith in all our operations.”

Pilgrim’s Pride pleaded guilty to antitrust charges in February 2021 and was ordered to pay $107.9 million in criminal fines.

Following numerous lawsuits of alleged U.S. poultry industry collusion to fix the price of chicken, the DOJ filed a motion in June 2019 to intervene in those cases and investigate the claims of the lawsuits.

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