Antitrust Law Daily Pilgrim’s Pride agrees to pay $110.5M fine in broiler chicken price fixing probe
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Wednesday, October 14, 2020

Pilgrim’s Pride agrees to pay $110.5M fine in broiler chicken price fixing probe

By Jeffrey May, J.D.

Antitrust Division’s first charge against a producer follows an indictment against 10 current and former industry executives and employees.

Pilgrim’s Pride Corporation, one of the largest producers and sellers of chicken in the United States, has been charged with conspiring to rig bids and fix prices for broiler chicken products. The company announced today that it has entered into a plea agreement with the Department of Justice Antitrust Division with respect to the charge. Pursuant to the plea agreement, which is subject to the approval of the federal district court in Denver, Pilgrim's Pride has agreed to a fine of $110,524,140. According to the company statement, the plea deal does not recommend a monitor or any restitution or probationary period and provides that the Antitrust Division will bring no further charges against Pilgrim’s Pride in this matter, provided the company complies with the terms and provisions of the agreement (U.S. v. Pilgrim’s Pride Corp., Case 1:20-cr-00330-RM).

The charge against Pilgrim’s Pride follows an indictment naming 10 current and former industry executives and employees. Among those charged with conspiring to rig bids and fix prices were Jayson Penn and William Lovette, who had reportedly served as CEOs of Pilgrim’s Pride, and two other individuals who were associated with the company. Executives at Claxton Poultry Farms, as well as employees of unnamed producers, have been charged as well. Tyson Foods, Inc. has reported that it has been fully cooperating with the Justice Department as part of its application for leniency under the Corporate Leniency Program.

According to the charge against Pilgrim’s Pride, the company participated in the conspiracy from 2012 through early 2019. The time frame matches the period alleged in the indictment against the individual defendants. Broilers, which are chickens under the age of 13 weeks, make up 98% or more of the chicken sold in the United States.

Class action litigation. Putative class action antitrust claims against Pilgrim’s Pride and other alleged conspirators are pending in the federal district court in Chicago. Recently, claims "mimicking charges" in the criminal investigation in the District of Colorado were consolidated with earlier putative class action claims. In the original claims, the plaintiffs alleged that poultry producers conspired to reduce broiler supply and to manipulate a broiler price index known as "Georgia Dock," which is one of the three primary price indices for broilers. While the federal district court in Chicago concluded that all three claims belonged together in the same case, the new bid rigging claims were bifurcated from the other claims due to the advanced stages of the original proceedings (In Re Broiler Chicken Antitrust Litigation, Case: 1:16-cv-08637).

The case is No. 1:20-cr-00330-RM.

Attorneys: Jonathan Clow and Justin Murphy for Department of Justice. Daniel Fetterman and Marc Kasowitz (Kasowitz Benson Torres LLP) for Pilgrim’s Pride Corp.

Companies: Claxton Poultry Farms; Pilgrim’s Pride Corp.; Tyson Foods, Inc.

MainStory: TopStory Antitrust GCNNews AntitrustDivisionNews

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