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Tyson Foods to pay $221.5m in settlement

TAGS: Business
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Company does not admit liability as part of the settlements in poultry price-fixing lawsuit.

Tyson Foods announced this week that it has reached an agreement to settle all class claims related to a lengthy poultry price-fixing lawsuit. Settlement terms were reached with the direct purchasers, commercial and institutional indirect purchasers and end-users (collectively, the Classes).

Under the terms of the settlements, the company has agreed to pay an aggregate amount of $221.5 million, which it said will be reflected in the company’s first quarter 2021 financial statements. The agreement will settle all outstanding claims brought by the plaintiffs.

Tyson said the settlements are subject to the execution of long-form settlement agreements with the respective parties and court approval thereof but that they do not settle claims made by plaintiffs who opted out of the Classes in the lawsuit.

“While the company does not admit any liability as part of the settlements, it believes that the settlements were in the best interests of the company and its shareholders in order to avoid the uncertainty, risk, expense and distraction of protracted litigation,” the company stated.

Tyson also recently agreed to settle claims brought by purchasers who bought chickens directly from the company, although no amount has been disclosed.  

The latest settlement comes shortly after Pilgrim’s Pride announced an agreement to settle in the same lawsuit. However, Pilgrim’s settlement only included the Direct Purchaser Plaintiff Class.

Under the settlement, Pilgrim’s agreed to pay $75 million, which it said will be reflected in the company’s fourth quarter 2020 financial statements.

Pilgrim’s also did not admit any liability for the claims alleged.

In October 2020, Pilgrim’s entered into a plea agreement with the U.S. Department of Justice (DOJ) Antitrust Division for its alleged role in the price-fixing investigation.

In the plea agreement, Pilgrim’s and DOJ agreed to a fine of approximately $110.5 million for restraint of competition. The company said the agreement does not recommend a monitor, any restitution or probationary period and stated that DOJ will bring no further charges against Pilgrim’s, 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 at the time. “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.”

Numerous other large companies were named in the lawsuit, including Sanderson Farms, House of Raeford, Foster Farms, Koch Foods, Mountainaire Farms and Perdue Farms.

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