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Pilgrim’s Pride enters plea deal with DOJ

TAGS: Business
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Company agrees to $110.5 million fine for its alleged role in price-fixing investigation.

Pilgrim’s Pride Corp. announced Oct. 14 that it has entered into a plea agreement with the U.S. Department of Justice Antitrust Division for its alleged role in a price-fixing investigation in the broiler industry.

In the plea agreement, which is subject to the approval of the U.S. District Court of Colorado, Pilgrim’s and DOJ agreed to a fine of approximately $110.5 million for restraint of competition that affected three contracts for the sale of chicken products to one U.S. customer. The company said the agreement does not recommend a monitor, any restitution or probationary period and states that DOJ will bring no further charges against Pilgrim’s in this matter, provided that the company complies with the terms and provisions of the agreement.

“Pilgrim’s is committed to fair and honest competition in compliance with U.S. antitrust laws,” Pilgrim’s chief executive officer Fabio Sandri said. “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 said it plans to record the fine as a miscellaneous expense in its financial statements in the third quarter of 2020.

Last week, six additional poultry company executives were indicted by a federal district court in Colorado for their alleged roles in a previously indicted conspiracy to fix prices and rig bids for broiler chicken products from at least 2012 until at least early 2019. Previously indicted defendants who remain charged in the superseding indictment are former Pilgrim’s CEO and president Jayson Penn, former Pilgrim’s vice president Roger Austin, as well as Mikell Fries and Scott Brady.

The six additional defendants named were Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake. Lovette was president and CEO at Pilgrim's during the time period but retired in March 2019. Kantola is currently listed as vice president of foodservice at Koch Foods but also worked for Pilgrim’s during the time frame. Little, who is the defendant being charged for making false statements and obstruction of justice, was a sales director at Pilgrim’s. Mulrenin worked for Tyson during the time period of the accusations and is currently director of national account sales at Perdue Farms. Roberts was an employee at a chicken supplier headquartered in North Carolina and a manager and director at a chicken supplier headquartered in Arkansas. Blake was a director and manager at a chicken supplier headquartered in Arkansas. Fries is president and board member at Claxton Poultry Farms headquartered in Georgia, and Brady is vice president of Claxton.

The indictment also charged one defendant with making false statements and obstruction of justice and contains additional allegations against the previously charged defendants in the same conspiracy.

“The division will not tolerate collusion that inflates prices American shoppers and diners pay for food,” said assistant attorney general Makan Delrahim of the DOJ Antitrust Division. “Executives who choose collusion over competition will be held to account for schemes that cheat consumers and corrupt our competitive markets. The division will also continue to charge those who knowingly lie to our law enforcement partners and obstruct our investigations; such conduct undermines our criminal justice system and will be prosecuted to the fullest extent of the law.”

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