US chicken executives charged with price-rigging

Four US poultry executives have been indicted in the first criminal case to emerge from a years-long investigation into whether meat companies rigged the price of chicken sold to restaurants and grocers. 

One of the defendants is the chief executive of Pilgrim’s Pride, a New York-listed poultry company controlled by JBS of Brazil, the world’s largest meat producer. Another is president of Georgia-based Claxton Poultry. 

Each of the four executives was accused of conspiring to fix prices and rig bids for broiler chickens, the type of bird raised for meat. 

The US Department of Justice antitrust division probe followed civil lawsuits from food distributors, supermarket chains and farmers alleging that US chicken companies had colluded in reducing production and driving up wholesale prices. Colorado-based Pilgrim’s Pride previously disclosed receiving a justice department subpoena last July. 

Other US poultry companies have also disclosed federal subpoenas related to the chicken investigation, including Tyson Foods — the largest US meat company — and Sanderson Farms. None of the companies has been charged. 

Prosecutors said their antitrust investigation was continuing. The four executives named in the indictment were Jayson Penn, Pilgrim’s Pride’s chief executive since 2019; Roger Austin, a former Pilgrim’s vice-president; Mikell Fries, Claxton’s president; and Scott Brady, a Claxton vice-president.

The charges alleged the four executives co-ordinated with others to submit similar price bids for sales to customers from 2012 until at least 2017. In one instance, executives texted and called one another to align prices for dark meat and wings offered to a buyers’ co-operative for fast-food franchisees, according to the indictment. 

In 2014, the indictment quoted Mr Penn, then executive vice-president, as telling Pilgrim’s Pride’s then-chief executive he had just raised chicken prices for a fast-food buyer, saying the buyer “and his crew will pay market price plus the special A-Hole Premium”, according to the indictment

Pilgrim’s Pride’s chief executive at the time was William Lovette, who was not charged or named in the indictment. 

“Rigging bids and fixing prices hurts consumers and undermines our economic system,” said Peggy Gustafson, inspector-general of the US Department of Commerce, which was involved with the case. “We are committed to working with our law enforcement partners to root out those who take advantage of the American public’s trust.”

A Pilgrim’s spokesman did not immediately respond to a request for comment, while Claxton declined to comment. Lawyers for the defendants could not immediately be reached. 

Shares of poultry producers fell after the charges were announced, with Pilgrim’s Pride dropping 10.5 per cent, Sanderson Farms off by 5.9 per cent and Tyson Foods declining 4 per cent.

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