DENVER – A federal grand jury in the US District Court in Denver indicted four executives at leading poultry companies for their alleged role in a conspiracy to fix prices for broiler chickens, the US Department of Justice (DOJ) said.
Named in the indictment were Jayson Penn, chief executive officer of Pilgrim’s Pride; Roger Austin, vice president of fresh foodservice at Pilgrim’s; Mikell Fries, president of Claxton Poultry; and Scott Brady, vice president of national accounts at Claxton Poultry. The indictment states the four executives conspired to fix prices and rig bids for broiler chickens across the United States from at least as early as 2012 until at least early 2017.
Mr. Penn, Mr. Austin, Mr. Fries and Mr. Brady are the first to be charged in an ongoing criminal investigation into price fixing and bid rigging involving broiler chickens, the DOJ said.
The court document states that the four executives “…together with co-conspirators, known and unknown to the Grand Jury, entered into and engaged in a continuing combination and conspiracy to suppress and eliminate competition by rigging bids and fixing prices and other price-related terms for broiler chicken products sold in the United States.”
The indictment said the conspiracy consisted of a continuing agreement to “...rig bids and to fix, maintain, stabilize and raise prices and other price-related terms for broiler chicken products sold in the United States.”
The document also contains excerpts of text messages between the co-conspirators and suppliers negotiating prices for dark meat.
The offense carries a statutory maximum penalty of 10 years in prison and a $1 million fine. However, the maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million.
“Particularly in times of global crisis, the division remains committed to prosecuting crimes intended to raise the prices Americans pay for food,” said Makan Delrahim, assistant Attorney General of the DOJ’s Antitrust Division. “Executives who cheat American consumers, restaurateurs and grocers and compromise the integrity of our food supply will be held responsible for their actions.”
Claxton Poultry, based in Claxton, Ga., is a supplier to foodservice and retail brands including Chick-fil-A, Walmart, Popeyes, KFC, Zaxby’s and Bojangles’, among others. The company processes more than 2 million birds per week and employs approximately 1,800 and 250 contract poultry growers.
Pilgrim’s Pride Corp. is a unit of Sao Paulo, Brazil-based JBS SA, the world’s largest meat packer.
For the first quarter ended March 29, 2020, Pilgrim’s recorded net sales of $3.07 billion. Net income for the first quarter was $67.3 million (including a one-time 9¢ per share gain on case settlement), or 27¢ per diluted share.