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Manufacturing Industry Updates

Pilgrim’s Pride to Pay $110.5 Million to Resolve Price-Fixing Allegations

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Pilgrim’s Pride Corp., the second-largest U.S. chicken processor by sales, agreed to a plea deal with the U.S. Justice Department and will pay a $110.5 million fine to resolve price-fixing charges. The fine is a penalty for restraining competition in three separate contracts with a U.S. customer.

The chicken processor is the first company to admit in court to what prosecutors allege was a seven-year effort across much of the U.S. chicken industry to inflate prices, according to Fox Business. The effort increased poultry prices paid by fast food chains and other chicken buyers, prosecutors alleged. 

Pilgrim’s said its plea deal provides that the Justice Department will bring no further charges against the Colorado-based company and doesn’t recommend an outside compliance monitor. The agreement doesn’t require any restitution or probationary period, according to reports. 

“We are encouraged that today’s agreement concludes the Antitrust Division’s investigation into Pilgrim’s, providing certainty regarding this matter to our team members, suppliers, customers and shareholders,” Pilgrim’s Chief Executive Fabio Sandri said. 

The agreement must still be approved by the U.S. District Court in Colorado, according to reports. 

In June, the government charged Pilgrim’s Pride President and CEO Jayson Penn and former Vice President Roger Austin with “conspiring to fix prices and rig bids for broiler chickens from at least 2012 to 2017.” Last week, a federal grand jury in Colorado indicted six more employees at chicken suppliers on price-fixing charges. Ten people have been charged in all. 

Tyson Foods said in June that it was cooperating with the Justice Department’s investigation, according to the New York Post. In April 2019, Arkansas-based Tyson received a grand jury subpoena and shared documents with the government. 

Nearly 40 lawsuits have been filed by grocers, restaurants and others alleging price fixing in the chicken industry. According to the New York Post’s report, “one lawsuit, filed by New York-based Maplevale Farms, said big chicken producers shared information through a third-party data firm and restricted supply by destroying breeder hens on several occasions.”

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