Antitrust Law Daily Pilgrim’s Pride, Claxton Poultry execs charged with fixing prices
Wednesday, June 3, 2020

Pilgrim’s Pride, Claxton Poultry execs charged with fixing prices

By Jeffrey May, J.D.

Antitrust Division brings first indictment in ongoing criminal investigation into price fixing and bid rigging involving broiler chickens against four industry executives.

A grand jury empaneled in the federal district court in Denver has charged four chicken producer executives with conspiring to fix prices. The Department of Justice Antitrust Division announced the indictment, naming Jayson Penn, Roger Austin, Mikell Fries, and Scott Brady, today. The four individuals are the first to be charged in an ongoing criminal investigation into price fixing and bid rigging involving broiler chickens (U.S. v. Penn, Case 1:20-cr-00152-PAB).

The defendants are current or former senior executives at two major broiler chicken producers. Penn is the chief executive officer of Pilgrim’s Pride. Austin also has served as a Pilgrim’s Pride executive. Fries is the president of Claxton Poultry, and Brady is a vice president at Claxton and had worked at Pilgrim’s Pride.

The government alleges that, from 2012 until early 2017, the four individuals conspired to fix prices and rig bids for broiler chickens across the United States. Broiler chickens are chickens raised to provide meat for human consumption.

The charge mentions seven suppliers but does not name them; however, based on the document details, Pilgrim’s Pride is "Supplier-1" and Claxton is "Supplier-2." The conduct of other unidentified employees of Pilgrim’s Pride and Claxton, as well as other suppliers, is described in the indictment. In attempting to make its case, the government points to negotiations between producers and fast-food restaurant operations.

In announcing the charge, Makan Delrahim, Assistant Attorney General in charge of the Department of Justice Antitrust Division, alluded to the COVID-19 pandemic and said that the Antitrust Division was committed to prosecuting crimes intended to raise the prices Americans pay for food particularly in times of global crisis. "Executives who cheat American consumers, restauranteurs, and grocers, and compromise the integrity of our food supply, will be held responsible for their actions," he added.

Class action litigation. The Justice Department provided notice of the charge to the federal district court in Chicago where antitrust class action litigation against the chicken producers remains pending. In the private litigation, purchasers allege a conspiracy to unlawfully manipulate a broiler price index known as "Georgia Dock," which is one of the three primary price indices for broilers. The private plaintiffs identified Pilgrim’s Pride and Claxton and others as alleged conspirators (In Re Broiler Chicken Antitrust Litigation, Case: 1:16-cv-08637).

Companies: Claxton Poultry Farms; Pilgrim’s Pride Corp.

MainStory: TopStory Antitrust GCNNews AntitrustDivisionNews Covid19

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