$75 Million Settlement Proposed By Pilgrim’s In Chicken Price-Fixing Case

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Pilgrim’s Pride Corp., the nation’s second-largest U.S. chicken processor, said it has reached a settlement to pay $75 million to a group of poultry buyers in a price-fixing lawsuit. The announcement was made in a filing with the Securities & Exchange Commission Monday (Jan. 11, 2021).

The proposed settlement, which must be approved by the court, would be the largest in a four-year legal battle over alleged collusion among the major chicken companies that dominate the $65 billion U.S. chicken industry. In October, Pilgrim’s agreed to pay a $110.5 million penalty in the Justice Department’s criminal price-fixing case. Lawsuits filed individually by major supermarket and restaurant chains remain outstanding, the company said.

Last year the U.S. Department of Justice filed criminal price-fixing and bid-rigging charges against 10 poultry-industry executives, including two former chief executives of Pilgrim’s. The defendants have pleaded not guilty. Other price-fixing allegations have been made in lawsuits involving the beef and pork processing industries.

“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,” the company said in a news release.

Chicken buyers, through their attorneys, have alleged that Pilgrim’s, Tyson Foods, Inc., Sanderson Farms, Inc., and perdue Farms, Inc., all kept tabs on each other’s operations through an industry benchmarking service and coordinated submissions to a chicken pricing index in an effort to keep chicken prices artificially high. The companies deny the allegations, arguing higher grain costs and growing demand for chicken led to the higher prices.

In the criminal complaint, the Justice Department has alleged that senior chicken-industry executives exchanged details of prices they planned to submit to major fast-food chains, sharing details on competitor’s activity through text messages and phone calls.

Pilgrim’s Pride, which produces 20% of U.S. chicken, is headquartered in Greeley, Colo., has 37,000 employees and reported $10.7 billion in 2017 revenue. JBS USA Holdings owns 78% of Pilgrim’s Pride.

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