Large U.S. poultry producer Pilgrim’s Pride (Pilgrim’s) became the first company to plead guilty for its role in a conspiracy to fix prices and rig bids for broiler chicken products, the Department of Justice announced today. The company has been sentenced to pay approximately $107.9 million in criminal fines.
According to the plea agreement entered in the U.S. District Court in Denver, from as early as 2012 and continuing at least into 2017, Pilgrim’s participated in a conspiracy to suppress and eliminate competition for sales of broiler chicken products in the U.S. that affected at least $361 million in Pilgrim’s sales of broiler chicken products.
“Today’s guilty plea demonstrates our unwavering commitment to prosecuting companies that violate the nation’s antitrust laws, especially when it involves something as central to everyday life as the food we eat,” said Richard Powers, acting assistant attorney general of the Department of Justice’s Antitrust Division. “This guilty plea is a direct result of the tireless efforts of our dedicated career prosecutors and staff, and partners at the FBI, Commerce Office of Inspector General (OIG) and USDA OIG.”
Steven D’Antuono, assistant director in charge of the FBI Washington Field Office, said the plea is another example of the FBI’s ongoing work to eliminate bid rigging and price fixing and to hold those conducting these activities accountable.
The ongoing investigation has yielded charges against 10 individuals for their efforts to illegally manipulate broiler chicken prices, and the FBI is committed to continuing this important work alongside the Department of Justice and our partners, he added.
Indicted defendants are former Pilgrim’s Pride Chief Executive Officer and President Jayson Penn, former Pilgrim’s President and CEO William Lovette, former Pilgrim’s Vice President Roger Austin, Claxton Poultry President Mikell Fries, Claxton Vice President Scott Brady, Timothy Mulrenin, William Kantola, Jimmie Little, Gary Roberts and Rickie Blake.
“We appreciate the ongoing commitment and concerted efforts of our law enforcement partners at the Department of Justice’s Antitrust Division, the FBI, and the Department of Commerce OIG to investigate a long running scheme affecting competition through the rigging of bids and price fixing of broiler chicken products,” said Special Agent-in-Charge Bethanne Dinkins of the USDA OIG. “During these uncertain times, USDA OIG will continue to dedicate resources and prioritize work that benefits hard working Americans through competitive prices for agricultural producers and fairness in pricing and quality of agricultural products for consumers.”
The case is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the broiler chicken industry, which is being conducted by the Antitrust Division with the assistance of the U.S. Department of Commerce OIG, FBI Washington Field Office, and USDA OIG. Other companies involved in the case include Tyson Foods, Koch Foods, Claxton Poultry, Perdue Farms and Sanderson Farms.
According to the DOJ, a violation of the Sherman Act carries a maximum penalty of a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
A spokesperson for Pilgrim’s said the latest proceeding in the U.S. District Court of Colorado formally approves the previously disclosed plea agreement between Pilgrim’s and the DOJ. Specifically, the plea agreement involves restraint of competition that affected three contracts for the sale of broilers chicken products by Pilgrim’s to one customer in the United States, the company spokesperson added.
The agreement 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.
Upon announcement of the plea agreement on October 13, 2020, Pilgrim’s CEO, Fabio Sandri stated: “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.”