Big poultry processor to pay $75 million to resolve antitrust lawsuit

Three months after a plea agreement with the government that included a $110.5 million fine, Pilgrim’s Pride, the second-largest U.S. poultry processor, said on Monday it would pay $75 million to settle a class-action lawsuit by its customers. Other price-fixing claims are pending in the legal system, said Pilgrim’s in a filing with the Securities and Exchange Commission.

“While Pilgrim’s does not admit any liability for the claims alleged in the Broiler Antitrust Civil Litigation, it believes a settlement was in the best interests of the Company and its shareholders,” said the company, based in Greeley, Colorado, and majority-owned by Brazilian meatpacker JBS SA.

If approved by a judge, the $75 million would be the largest settlement yet in lawsuits that allege collusion among poultry processors to rig prices, said the news site Meatingplace. There have been allegations of price-fixing among pork and beef processors too.

At latest count, 10 executives from at least five poultry processing companies have been indicted by a federal grand jury in Denver as part of an ongoing investigation by the Justice Department. The indictments include two former chief executives of Pilgrim’s. The government says the price-fixing conspiracy operated from at least 2012 until at least early 2019 and resulted in higher prices for consumers.

Americans spend tens of billions of dollars annually on meat. Roughly 40% of that is for broiler chicken, according to USDA data. Beef makes up 30% of meat consumption, followed by pork, at 23%, and turkey, at 6%.

In mid-October last year, Pilgrim’s announced a plea agreement with the Justice Department and said it would pay a $110.5 million fine “for restraint of competition that affected three contracts for the sale of chicken products to one customer in the United States.”

Tyson Foods, the largest U.S. poultry processor, said last June that it was cooperating with the Justice Department in the price-fixing investigation as part of an application for corporate leniency, which would shield the company from criminal charges. Tyson is based in Springdale, Arkansas.

The five largest U.S. poultry processors are, in order, Tyson, Pilgrim’s, Sanderson Farms, Perdue, and Koch Food.

To read Pilgrim’s Form 8-K filing with the SEC, click here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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