Senior executives from two major US chicken producers have been indicted for allegedly conspiring to fix prices and rig bids on “broiler chickens,” which are sold to grocery stores and restaurants.
The indictment, returned Wednesday by a federal grand jury in the US District Court in Denver, Colorado, marks the first charges to be brought on as part of an ongoing Justice Department investigation of anti-competitive behavior in the chicken industry.
“Particularly in times of global crisis, the division remains committed to prosecuting crimes intended to raise the prices Americans pay for food,” Makan Delrahim, assistant attorney general for the Department of Justice’s Antitrust Division, said in a statement. “Executives who cheat American consumers, restauranteurs, and grocers, and compromise the integrity of our food supply will be held responsible for their actions.”
The one-count indictment levels charges against the Pilgrim’s Pride (PPC) CEO, Jayson Penn, and former vice president, Roger Austin. Colorado-based Pilgrim’s Pride (PPC) is the second largest broiler chicken supplier in the country, after Tyson Foods. Also charged were Mikell Fries and Scott Brady, president and vice president of Georgia-based Claxton Poultry Farms.
The four men allegedly participated in a “network of suppliers and co-conspirators” with the aim of fixing prices and rigging bids for chicken sales across the United States from 2012 to 2017, according to the indictment. The network allegedly took actions such as agreeing upon and submitting similar bids for pricing terms, including discount levels.
Neither Pilgrim’s Pride nor Claxton Poultry immediately returned a request for comment on the indictment.
The charge carries a statutory maximum penalty of 10 years in prison and a $1 million fine, though the fine may be increased depending on the loss suffered by victims, according to a statement from the Justice Department.
A number of companies in the chicken industry have faced accusations of collusion and price fixing in recent years. In 2018, food distributors Sysco (SYY) and US Foods (USFD) accused 17 different poultry producers, including Tyson and Pilgrim’s Pride. Both companies issued statements at the time denying the allegation in the suits.