U.S. launches criminal probe into alleged chicken price fixing by Tyson, rivals

FILE PHOTO: Tyson food meat products are shown in this photo illustration in Encinitas, California May 29, 2014. REUTERS/Mike Blake

(Reuters) - The U.S. Department of Justice has begun a criminal probe into allegations that Tyson Foods Inc and other poultry processors including Pilgrim’s Pride Corp and Sanderson Farms Inc colluded to fix poultry prices, court documents show.

The DOJ filed a motion to intervene and stay discovery of evidence in an antitrust lawsuit involving the companies and has convened a grand jury to investigate, according to a court filing from Friday.

Shares of Tyson, Pilgrim’s Pride and Sanderson Farms fell in late afternoon trading.

U.S. food distributors have filed lawsuits against Tyson and other poultry processors, alleging that the companies had colluded since 2008 to reduce output and manipulate prices.

“The civil plaintiffs’ claims as to Sanderson Farms are wholly without merit, and we are committed to defending the case vigorously,” Sanderson Farms said, adding it has not been subpoenaed in connection with the DOJ investigation.

Pilgrim’s Pride Corp, which is mostly owned by Brazilian meat packer JBS SA, said it did not fix prices.

“Pilgrim’s strongly denies any allegations of anti-competitive conduct,” spokesman Cameron Bruett said. “The company welcomes the opportunity to defend itself against these claims through the legal process.”

Tyson, which has previously denied the allegations, did not immediately respond to a request for comment.

Reporting by Uday Sampath in Bengaluru