JBS S.A. owned Pilgrim's Pride is the second-largest chicken processor in the United States. But now, as it turns out, Pilgrims Pride is also more crooked than Lombard Street.
The Department of Justice says Pilgrim's Pride fixed chicken prices and rigged bids in a conspiracy with other Big Meat companies for years. The DOJ says between 2012 and 2017 Pilgrim's Pride suppressed and eliminated competition for broiler chicken products sold to Kentucky Fried Chicken, affecting at least $361 million dollars in sales.
When shown the evidence proving Pilgrim's was dead bang guilty the company passed on a court fight and instead copped a plea, agreeing to pay a fine of $107.9 million.
All this follows on the heels of January's settlement of a class-action lawsuit by Maplevale Farms. Pilgrim's Pride agreed to pay $75 million for...yeah, you guessed it, fixing broiler chicken prices.
When the Maplevale Farms settlement was announced Pilgrim's Pride president and chief executive officer Fabio Sandri tried to appease shareholders in a SEC filing:
“While Pilgrim’s does not admit any liability for the claims alleged in the Broiler Antitrust Civil Litigation, it believes a settlement was in the best interests of the Company and its shareholders.”
Pilgrim's Pride does not admit any liability for the claims alleged??? That's a prideful (haughty, disdainful, lordly, superior – you pick one) way of saying we didn't do it.
But Pilgrim's Pride did. In spades.
In trying to buff up its tarnished image Pilgrim's Pride attempted to make a point in the DOJ plea agreement that current management walks the straight and narrow. “It wasn't us, it was the crooked wings that managed the place before we got here!”
“...the United States agrees that it will not bring criminal charges against any current director, officer, or employee of the defendant or its related entities for any act or offense committed before the date of signature of this Plea Agreement and while that person was acting as a director, officer, or employee of the defendant or its related entities that was undertaken in furtherance of an antitrust conspiracy involving the sale of broiler chicken products in the United States except that the protections granted in this paragraph do not apply to Roger Austin, Jimmie Lee Little, William Lovette, Jayson Penn, and the individuals listed in Attachment A filed under seal, regardless of their employment status, or to any former director, officer, or employee of the defendant or its related entities...”
The plea agreement requires Pilgrim's Pride to fully cooperate in the prosecution of former CEO Jason Penn and former vice president Roger Austin who were indicted last June for allegedly cooking up and implementing the scheme.
Tyson Foods is also on the Department of Justice meat hook. Tyson pulled a Pilgrim's Pride in admitting no liability while coughing up $221.5 million to settle the Maplevale Farms class-action lawsuit earlier this year. Birds of a feather flock together. How DOJ ultimately deals with Tyson Foods remains up in the air. The company was served with a DOJ grand jury subpoena almost two years ago. Tyson turned over information to the DOJ and now is seeking to enter the Justice Department's antitrust criminal leniency program.
Meanwhile, the Department of Justice investigation is continuing and I would not be the least surprised if other Big Meat companies are indicted. Ultimately it's the public that pays when Big Meat colludes to rig prices and avoid the competitive market economics of supply and demand.
About Dave Dickey
Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for the Midwest Center covers agriculture and related issues including politics, government, environment and labor. His opinions are his own and do not reflect the Midwest Center for Investigative Reporting. Email him at firstname.lastname@example.org.