Justice Department’s Antitrust Division Charges Four Executives in Chicken Price-Fixing Investigation (Part I of III)

The Justice Department’s Antitrust Division recently announced the indictment in Colorado federal court of four executives from two chicken producer companies for participation in a long-running price-fixing and bid-rigging conspiracy.

The indictment charges Jayson Penn, president and CEO of Colorado-based Pilgrim’s Pride, and former Vice President Roger Austin, and Georgia-based poultry producer Claxton Poultry’s President Mikell Fries and Scott Brady, a Claxton Poultry Vice President. 

According to the indictment, the conspiracy involved at least seven broiler chicken suppliers, most of which appear to be cooperating with the ongoing probe, from at least 2012 and into 2017.  The defendants, along with other co-conspirators, engaged in a conspiracy involving agreements on pricing and discounts for annual contracts to supply broiler chickens.  The executives used phone, email and text messages to closely coordinate bids made to restaurants, grocery stores and buying cooperatives.

Tyson Chicken, Sanderson Farms, and Pilgrim’s Pride have publicly disclosed their cooperation with the ongoing investigation.  Pilgrim’s Pride is a subsidiary of Brazilian meat supply conglomerate, JBS SA.  Claxton Poultry is fighting the charges but has not yet been indicted.  Perdue Farms appears to be cooperating as well.

DOJ’s criminal investigation was disclosed in 2019 when DOJ intervened in a long-running civil case against various chicken producers claiming that several suppliers were engaged in a price-fixing and bid-rigging conspiracy.  DOJ intervened last year to request stay of the discovery in the civil case, and then issued grand jury subpoenas to various chicken suppliers.

Under the Antitrust Division’s leniency program, the first company to cooperate and disclose the existence of the conspiracy is given a complete pass, along with any executives and employees that cooperate with the investigation.  The first company “in the door” at DOJ also is rewarded by a de-trebling of damages in any private suit brought by victims of the price-fixing conspiracy.  Subsequent cooperating companies are rewarded with discounts from any applicable fine that decrease in amount with each company.

Tyson Chicken issued a statement confirming its cooperation, and suggested that it quickly sought leniency by cooperating with the DOJ probe in response to the grand jury subpoena.  Tyson has suggested that it may have been the first company to self-report but that has not been confirmed.

DOJ’s indictment against the four executives from Pilgrim’s Pride and Claxton Poultry is its first action arising from the grand jury investigation.  Given the size of the conspiracy and the cooperation of several companies, additional indictments are expected. 

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