CEO among indicted for chicken price fixing

The CEO of Pilgrim’s Pride is one of four current and former chicken company executives who have been indicted on charges of price-fixing

WHEAT RIDGE, Colo. — The CEO of Pilgrim’s Pride is one of four current and former chicken company executives indicted Wednesday on charges of price-fixing.

The U.S. Department of Justice said a federal grand jury in Colorado found that executives from Greeley, Colorado-based Pilgrim’s Pride and Claxton, Georgia-based Claxton Poultry Farms conspired to fix prices and rig bids for broiler chickens from at least 2012 to 2017.

Pilgrim’s Pride President and CEO Jayson Penn was charged, along with former Pilgrim’s Pride Vice President Roger Austin. Claxton Poultry President Mikell Fries and Vice President Scott Brady also were charged.

All four men are scheduled to appear before a magistrate judge in Denver federal court Thursday afternoon, according to court documents.

The Associated Press left phone and email messages seeking comment with Pilgrim’s Pride and an attorney for Claxton Poultry.

The charges were the first in a long-running investigation into price-fixing in the chicken industry. Broiler chickens are chickens raised for human consumption and sold to grocery stores and restaurants.

According to prosecutors, the men communicated about their prices and negotiations to try to fix, stabilize and raise prices. The indictment cites a number of alleged phone calls and text exchanges between them.

In one text exchange, Brady allegedly told Fries on Nov. 13, 2012 that he had talked to Austin and found out that Pilgrim’s Pride was 3 cents higher on an eight-piece bone-in broiler chicken. Brady said Austin wanted Claxton to raise its prices.

“Tell him we are trying!” Brady responded, according to the indictment.

Pilgrim’s Pride is a division of JBS USA, the U.S. subsidiary of Brazilian meat production company JBS SA. Pilgrim’s Pride has more than 54,000 employees and 36 production facilities in the U.S. and abroad. The company says it processes one of every five chickens in the U.S. Claxton Poultry has 2,000 employees and supplies 300 million pounds of chicken per year to customers include Chick-fil-A.

The Justice Department indicated the investigation was ongoing last summer when it asked for a temporary pause in discovery proceedings in a separate lawsuit accusing Pilgrim’s Pride, Tyson Foods and others of fixing poultry prices. At the time, the Justice Department said it wanted to protect an ongoing grand jury investigation.

That suit, filed by New York-based Maplevale Farms, said companies shared information through a third-party data firm and restricted supply by destroying breeder hens on several occasions.

The case is one of nearly 40 filed by grocers, restaurants and others against the poultry companies. Kroger, Walmart, the Hooters chain and Darden Restaurants — which owns Olive Garden — are among those who have sued.

The Federal Bureau of Investigation and the Department of Commerce assisted in the investigation, the Justice Department said.

“Particularly in times of global crisis, the (Justice Department’s antitrust) division remains committed to prosecuting crimes intended to raise the prices Americans pay for food,” Assistant Attorney General Makan Delrahim said in a statement.

The executives could each face 10 years in prison and a $1 million fine.

Pilgrim’s Pride Corp. shares tumbled more than 12% Wednesday. Tyson Foods Inc. shares ended down almost 4%.

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Durbin reported from Ann Arbor, Michigan.