Pilgrim’s Pride Pleads Guilty to Chicken Price-Fixing Charge, to Pay $107.9 Million Fine

By Reuters
February 24, 2021US News
Pilgrim’s Pride Pleads Guilty to Chicken Price-Fixing Charge, to Pay $107.9 Million Fine
Workers at Pilgrim's Pride, parent company of Wampler Foods, change shifts in Franconia, Pa., on Oct. 14, 2002. (William Thomas Cain/Getty Images)

Pilgrim’s Pride Corp, one of the largest U.S. poultry producers, pleaded guilty and was sentenced to pay a $107.9 million fine on Tuesday to settle federal charges it conspired to fix chicken prices and passed on the costs to consumers and other purchasers.

Chief Executive Fabio Sandri entered the guilty plea on the company’s behalf at a hearing before U.S. District Judge Raymond Moore in Denver. A plea agreement had been reached in October.

The plea followed the indictments last year of 10 poultry industry executives, including former Pilgrim’s Pride Chief Executives Jayson Penn and Bill Lovette, on price-fixing charges. All 10 have pleaded not guilty.

Pilgrim’s Pride is based in Greeley, Colorado, and owned mainly by Brazilian meatpacker JBS SA.

It was the first U.S. poultry company to settle charges that companies conspired from 2012 to at least 2019 to reduce production in order to boost prices of broiler chickens, which account for most chicken meat consumed in the United States.

Chicken is pictured in New York March 11, 2015. (Lucas Jackson/Reuters)

Prosecutors estimated that Pilgrim Pride’s illegal activity affected at least $361 million in sales of its broiler chicken products.

The fine was less than federal guidelines recommended because of the company’s “substantial assistance,” Moore said.

Tyson Foods Inc, another poultry producer, has said it was cooperating with the Justice Department probe under a corporate leniency program.

Pilgrim’s Pride, Tyson, Perdue Farms Inc and Sanderson Farms Inc are also facing federal lawsuits in Chicago by consumers, restaurants, supermarket chains and food distributors over alleged price rigging dating back to 2008.

The producers were accused there of using data from an outside service to review rivals’ production and pricing activities, which should have remained confidential.

Chick-fil-A, Kroger Co, Walmart Inc and Sysco Corp are among the plaintiffs in Chicago. In January, Pilgrim’s Pride and Tyson agreed to pay a respective $75 million and $221.5 million to settle other claims there.

By Jonathan Stempel