Pilgrim’s Pride has agreed to pay a $110.5 million fine to resolve charges of price-fixing of broiler chickens, the company announced.
In a plea agreement reached with the Justice Department’s Antitrust Division, Pilgrim’s said the fine was for “restraint of competition that affected three contracts for the sale of chicken products to one customer in the United States.”
“The agreement does not recommend a monitor, any restitution or probationary period, and provides that the Antitrust Division will bring no further charges against Pilgrim’s in this matter, provided the company complies with the terms and provisions of the agreement,” the company, which is majority owned by meatpacking giant JBS, said. “Pilgrim’s expects to record the fine as a miscellaneous expense in its financial statements in the third quarter of 2020.”
The agreement comes a week after a grand jury returned six indictments against chicken industry executives and employees in an ongoing investigation of price-fixing and bid-rigging in the industry.
One of the defendants named in that indictment is William Lovette, the president and CEO of Pilgrim’s Pride until he was replaced last year by Jayson Penn, who was named in initial indictments announced in June. Penn, who was put on leave that month, has since left the company.
In addition to Penn, the June indictments included a former vice president of Pilgrim’s and two executives of Claxton Poultry Farms. Other current and former employees named in the indictments are from Tyson Foods, Perdue Farms and Koch Foods.
Pilgrim’s CEO Fabio Sandri said in the company’s statement Wednesday that “Pilgrim’s is committed to fair and honest competition in compliance with U.S. antitrust laws. 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.”
A criminal information filed by DOJ in Colorado federal court Tuesday says that “beginning at least as early as 2012 and continuing through at least early 2019,” Pilgrim’s and co-conspirators “entered into and engaged in a continuing combination and conspiracy to suppress and eliminate competition by rigging bids and fixing prices and other price-related terms for broiler chicken products” sold in the U.S.
Pilgrim’s has been cooperating with the federal probe and is expected to plead guilty in coming days, The Wall Street Journal reported, citing “people familiar with the investigation.”
The company is scheduled to appear in court Thursday, according to the court docket.
After the original indictments were announced in June, Tyson Foods said it had been “fully cooperating with the DOJ as part of its application for leniency under the DOJ’s Corporate Leniency Program. A formal grant of leniency will mean that neither the company nor any of its employees will face criminal fines, jail time or prosecution.”
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