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Pilgrim’s Pride Agrees To $75 Million Settlement For Price-Fixing Claims

This article is more than 3 years old.

Pilgrim’s Pride, one of the nation’s largest chicken processors, has reached a $75 million deal to settle price fixing claims. The company will be coughing up the largest settlement thus far in a drawn-out legal battle over alleged collusion among the companies which dominate America’s $65 billion chicken industry.

The deal comes just three months after the company agreed to a $110.5 million fine with the Department of Justice. In that deal, which officials say affected three contracts for sale of chicken products to one customer in the U.S., the DOJ would not bring further charges against the company or recommend a monitor or any probationary period.

In June, a federal grand jury in the U.S. District Court in Denver, Colorado, returned an indictment against Jayson Penn, then president and CEO of the company, along with former Pilgrim’s Pride Vice President Roger Austin, for their role in a conspiracy to fix prices and rig bids for broiler chickens across the nation from at least as early as 2012 until 2017. Additionally indicted were Claxton Poultry President Mikell Fries and Vice President Scott Brady.

Lawyers representing chicken buyers have alleged that Pilgrim’s Pride, in addition to Tyson Foods, Sanderson Farms and Perdue Farms, engineered a plan to track each other’s operations through an industry benchmarking service and coordinating submissions to a chicken pricing index in an effort to keep chicken prices artificially inflated. The companies have contested the claims, saying that the higher prices were actually inflated due to higher grain costs and growing demand for chickens. This is not the first time the companies have found themselves in hot water as poultry buyers including Chick-fil-A and Target Corp. have sued top U.S. chicken producers for fixing meat prices for years.

Mostly owned by Brazilian meat packer JBS SA, Pilgrim’s Pride is the nation’s second-largest supplier of broiler chickens behind Tyson Foods. Pilgrim’s Pride’s largest customers include the wholesaler Costco and the fast-food chain Kentucky Fried Chicken. Broiler chickens are bred and raised specifically for meat production and account for nearly all the chicken meat sold in the United States.

JBS also recently reached a settlement agreement in a lawsuit which accused the company of fixing pork prices for direct purchasers through conspiring with other meat processors.

The settlement amount will be reflected in Pilgrim’s fourth-quarter earnings.

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