Pilgrim’s Pride pays US$110.5m in plea deal with US Department of Justice after chicken price-fixing allegations

14 Oct 2020 --- Pilgrim’s Pride, one of the largest chicken producers in the US, has agreed to a plea deal and to pay US$110.5 million in fines following an investigation into alleged price-fixing. The Justice Department probe involved allegations in the sale of broiler chicken products. The antitrust division of the department fined the chicken giant for restraining competition. This impacted several contracts for the sale of products to a customer in the US. 

“We are encouraged that the agreement concludes the Antitrust Division’s investigation into Pilgrim’s, providing certainty regarding this matter to our team members, suppliers, customers and shareholders,” says Fabio Sandri, Pilgrim’s CEO.

Antitrust probe
The agreement does not recommend a monitor, any restitution or probationary period. It provides that the Antitrust Division will bring no further charges against Pilgrim’s in this matter, provided that the company complies with the terms and provisions of the agreement. 

Pilgrim says that it expects to record the fine as a miscellaneous expense in its financial statements in the third quarter of 2020.

The plea agreement is still subject to the United States District Court of Colorado’s approval, Pilgrim’s headquarters' location.

Prosecutors had accused the multinational food company – which is also a key player in Puerto Rico and the second-largest chicken producer in Mexico – of acting with others to suppress competition in the chicken market from 2012 to 2019. Pilgrim’s Pride is majority-owned by Brazilian meat conglomerate JBS.Fabio Sandri, Pilgrim’s CEO.

Based in Brazil, Pilgrim’s Pride employs around 38,000 people with sales and has operations in 12 states, Mexico and Puerto Rico. It can process approximately 36 million birds per week, resulting in almost 9.5 billion pounds of live chicken annually. 

Pilgrim’s Pride products are distributed primarily through foodservice and retail outlets.

In 2016, the company invested US$190 million in growing its brands through improved feed production and other investments.

More recently, Pilgrim’s said it would acquire Tulip Limited last August – a leading prepared foods supplier with 12 fresh and value-added operations in the UK and the largest pig producer in Britain – from Danish Crown. The transaction creates one of the largest integrated prepared foods businesses in the UK with a portfolio of brands and retail private label solutions. 

“Pilgrim’s is committed to fair and honest competition in compliance with US antitrust laws,” adds Sandri.

Sandri was the company’s former CFO but took up the CEO role, replacing Jayson Penn, who left the chicken processing company amid the investigation and who was indicted earlier this year on charges of seeking to set a fixed price for chickens with other industry executives. 

By Gaynor Selby