Pilgrim’s Pride, the nation’s second-largest chicken producer, has reportedly agreed to a plea deal with the U.S. Justice Department, which accused it of price-fixing.
The Wall Street Journal reports that the company will pay a $110.5 million fine and admit to what government prosecutors have long argued -- that major producers have worked together to inflate the price of chicken.
The company told The Journal that its agreement with the government resolves all charges in connection with the case and does not require restitution, a probation period, or a compliance monitor.
“We are encouraged that today’s agreement concludes the Antitrust Division’s investigation into Pilgrim’s, providing certainty regarding this matter to our team members, suppliers, customers and shareholders,” said Pilgrim’s Chief Executive Fabio Sandri in a statement.
Chicken producers have been suspected of artificially inflating prices for years. In 2018, two food service companies sued 17 chicken producers, including Pilgrim’s Pride, alleging that they conspired to boost chicken prices by reducing supplies.
In advance of the reported plea deal, Pilgrim’s Pride this week was named in a criminal-information document. It charged the company of price-fixing and bid-rigging. Federal prosecutors accused the company of working with other companies to reduce competition in the chicken market from 2012 to early 2019.
According to The Journal, the indictment is a normal part of such a plea agreement. Pilgrim’s Pride is expected to plead guilty to the charges in court later this week.
Other producers under investigation
The Justice Department is also investigating other chicken producers. In June, Tyson Foods revealed that it is cooperating with government prosecutors. At the time, the company said it had obtained information relevant to the investigation and had alerted authorities.
The government’s case maintains that actions by major chicken producers raised the cost of chicken paid by consumers, not just at the supermarket but also at restaurants. Pilgrim’s Pride is primarily a supplier of chicken to food service companies and fast food restaurants.
The government alleges that executives at chicken producers communicated regularly and encouraged actions that resulted in reducing supplies and increasing prices. It subpoenaed electronic communications, including emails and texts, as part of its probe.