Pilgrim's Pride CEO indicted over alleged U.S. chicken price-fixing

WASHINGTON/CHICAGO (Reuters) - The chief executive of Pilgrim’s Pride Corp, a major U.S. poultry company, was indicted along with three other current and former industry executives on charges of seeking to fix the price of chickens, the Justice Department said on Wednesday.

FILE PHOTO: Chickens are displayed for sale in the meat department of a grocery store as the outbreak of the coronavirus disease (COVID-19) continues in the Brooklyn borough of New York U.S., May 5, 2020. REUTERS/Lucas Jackson

The charges are the first in a criminal probe of price-fixing and bid-rigging involving broiler birds, which account for most chicken meat sold in the United States.

A grand jury in Denver indicted Jayson Penn, the president and CEO of Pilgrim’s Pride, which is mostly owned by Brazilian meat packer JBS SA, as well as a former executive at the Colorado-based chicken supplier, the Justice Department said in a statement. Two executives from a Georgia chicken producer were also indicted.

The indictments come after grocers, retailers and consumers accused Pilgrim’s Pride, Tyson Foods Inc and other poultry processors in a lawsuit of conspiring since 2008 to inflate prices for broiler chickens. The companies have denied the allegations.

“Executives who cheat American consumers, restaurateurs, and grocers, and compromise the integrity of our food supply, will be held responsible for their actions,” said Assistant Attorney General Makan Delrahim, head of the Justice Department’s Antitrust Division.

Pilgrim’s Pride shares fell 12%, while shares for rivals Tyson Foods and Sanderson Farms dropped about 4% and 6%, respectively.

Pilgrim’s Pride said it would cooperate with the Justice Department in their investigation.

The indictment says a conspiracy to fix chicken prices ran from 2012 until at least early 2017, and cites executives’ text messages and emails.

In addition to Penn, the indicted executives were Roger Austin, a former Pilgrim’s vice president; the president of Claxton Poultry, Mikell Fries; and Scott Brady, a vice president at Claxton.

A spokesman for Claxton, which says it supplies Chick-fil-A, declined to comment, and a lawyer for Claxton did not immediately respond to requests for comment. The indicted individuals could not immediately be reached.

Reporting by Susan Heavey, Tom Polansek and Diane Bartz; additional reporting by Rama Venkat in Bengaluru; Editing by Chris Reese, Tom Brown and Sherry Jacob-Phillips