UPDATE: Feb. 24, 2021:Pilgrim's Pride pleaded guilty and agreed to pay a $107.9 million fineto the U.S. Justice Department to settle federal charges that it conspired to increase chicken prices and pass those costs on to consumers and other poultry buyers. Pilgrim’s is the first company to plead guilty. Separately,an Illinois judge approved a dealwhere Tyson will pay $80 million to broiler chicken purchasers, while Pilgrim's Pride will pay $75 million to resolve their claims.
UPDATE: Jan. 20, 2021:Tyson Foods said in a regulatory filingwith the U.S. Securities and Exchange Commission it will pay $221.5 million to settle all class claims with plaintiffs who accused it of price fixing. The settlements were with so-called “end-user” consumers and with more than 30 commercial purchasers,Reuters reported."While the company does not admit any liability as part of the settlements, it believes that the settlements were in the best interests of the company and its shareholders in order to avoid the uncertainty, risk, expense and distraction of protracted litigation," Tyson said.
UPDATE: Jan. 12, 2021:Tyson Foods separately struck an agreement to settle with the group of chicken buyers to settle price-fixing claims, but did not disclose the amount,The Wall Street Journal reported. Tyson reportedly did not admit wrongdoing in the settlement, which is still subject to court approval.
Dive Brief:
- Pilgrim’s Pride agreed to pay $75 million to chicken buyers to settle price-fixing claims,according to an 8-K filing with the U.S. Securities and Exchange Commission. The amount will be reflected in Pilgrim's upcoming Q4 earnings.
- The chicken company, which is majority owned by JBS SA,said in a releasethat Pilgrim’s does not admit any wrongdoing for the claims in the civil litigation, but "it believes a settlement was in the best interests of the Company and its shareholders."
- This settlement comes just months afterPilgrim's agreedto pay a $110.5 million fineas part of a plea deal with the U.S. Department of Justice's antitrust division in the price-fixing investigation.
Dive Insight:
朝圣者的发现自己的中心——价格fixing accusations in the chicken industry for years, and now it is paying nearly $200 million in settlements and fines as a result. Although it still needs court approval, this $75 million civil settlement would be the largest so far in these accusations that have embroiled the entire industry,according to The Wall Street Journal.
Restaurant chains,including Chik-fil-A, as well asgrocery stores,CPG companiesand food distributors have filed civil suits making antitrust accusations against chicken processors in recent years. This case doesn't settle all complaints against Pilgrim's, since there are still pending lawsuits filed by supermarket and restaurant chains,according to the release. So although this agreement would settle the issue with some chicken buyers, there may be more to come. In previous settlements, The Journal reported, smaller chicken companies agreed to collectively pay about $13 million.
The industrywide price-fixing accusations were originally unveiled in 2019. The U.S. Justice Department disclosed its investigation when itintervenedin a2016 price-fixing lawsuitthat accused chicken producers — including Pilgrim's, Perdue Farms, Tyson Foods and Sanderson Farms — of conspiring to inflate prices.The Journal reported the DOJ thensubpoenaed Tyson, Pilgrim’s, Sanderson and other poultry producers. Tyson latersaid it was cooperatingwith the investigation under the DOJ's Corporate Leniency Program, which allowed it to come forward and avoid criminal charges.
朝圣者的第二大鸡肉生产商the U.S., is working hard to move forward from these price-fixing accusations. It has consistently made headlines pertaining to the accusations during the last year.
The company'sprevious two CEOswere among 10 poultry producer officialsindicted on price-fixing chargeslast year. Then-CEO Jayson Pennwasindictedin June. Hepleaded not guiltyto the charges and took a paid leave of absence to focus on his defense. In September,Pilgrim's permanently replaced himwith the company’s CFO Fabio Sandri.
At a time when thepandemic is already causingfinancial hardship among meat companies, which have spent hundreds ofmillions on precautionsin plants andare facing lawsuitsfor wrongful deaths among its workers, hefty fines and settlements are not ideal. But paying settlements and fines torid a company of a probe that has continued to haunt it could be a strategic move for the futurewithout forcing anyone to admit wrongdoing.
Antitrust accusations in the food industryhave escalated in recent years, and other chicken processors may be likely to offer settlements. But these accusations aren't just in the chicken industry. JBS alsorecently reached a settlementagreement in a lawsuit accusing the company of fixing pork prices for direct purchasers through conspiring with other meat processors.
