Forbes: Four Executives Charged With Poultry Price-Fixing
Jun 4, 2020
Four Executives Charged With Poultry Price-Fixing
Broiler chickens account for most of the chicken processed in the United States.
Four Executives from two chicken companies, including one of the country’s largest, have been officially charged with price fixing. A federal grand jury in the U.S. District Court in Denver, Colorado, returned an indictment against the executives Wednesday for their role in a conspiracy to fix prices and rig bids for broiler chickens across the United States from at least as early as 2012 until 2017.
According to the indictment, Jayson Penn, the president and CEO of Pilgrim’s Pride, along with former Pilgrim’s Pride Vice President Roger Austin were charged. Additionally indicted were Claxton Poultry President Mikell Fries and Vice President Scott Brady.
"Particularly in times of global crisis, the division remains committed to prosecuting crimes intended to raise the prices Americans pay for food," said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. "Executives who cheat American consumers, restauranteurs, and grocers, and compromise the integrity of our food supply, will be held responsible for their actions."
The offense charged carries a statutory maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million.
The executives are the first to be charged in an ongoing criminal investigation into price fixing and bid rigging involving broiler chickens.
Broiler chickens are bred and raised specifically for meat production and account for nearly all the chicken meat sold in the United States.
“Price fixing in the agricultural industry is extremely harmful to everyone besides the companies who engage in this unethical practice,” says National Farmers Union President Rob Larew. “Ultimately, it means those companies pay farmers even less for their hard work while charging restaurants, grocery stores, and American consumers more for food.”
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 KFC.
The move comes as other sectors of the meat industry have also come under investigation for the same practices. In March, U.S. Senators called for investigations into record profits for beef processors like Cargill and Tyson Foods after ranchers complained that surging meat prices due to coronavirus hoarding did not translate into higher cattle prices.
“This level of market power unfortunately isn’t unique to poultry; in fact, many other sectors, including beef and pork, are even more concentrated,” said Larew. “Unsurprisingly, there have been allegations of price fixing against corporations in those industries as well. But price fixing is only a symptom of the much bigger problem of corporate consolidation. Companies are only able to employ anti-competitive business practices when they’ve amassed control over their respective industries; in this instance, just five companies control 60 percent of the chicken market in the United States.”
An indictment alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.