Pilgrim’s Pride, poultry stocks slip as price fixing trial progresses

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Poultry producers like Pilgrim’s Pride Corporation (NASDAQ:PPC) saw shares slip on Monday as former executives once again find themselves in court over price fixing allegations.

Per a filing in Colorado District Court, the government’s case to hold 5 executives, past and present, at major broiler chicken producers accountable for promoting price-fixing conspiracy bid rigging for broiler chicken products from 2012 to 2019 is kicking off on Monday with jury selection. The case had originally targeted not only Pilgrim’s Pride executives (PPC -6.2%), but Tyson Foods (TSN -0.0%), Perdue Farms, Claxton Poultry, Koch Foods, George’s Inc., and Case Foods.

As the case has been tried twice already, both times ending in a deadlocked jury, the list of defendants has been cut in half to 5 from the previous 10. As such, only Pilgrim’s Pride and Claxton Poultry Farms executives remain as defendants. This government previously justified the charges being dropped against five executives "in an effort to streamline the case and conserve the resources of the court, the parties, and the public.”

Both Pilgrim’s Pride (PPC -6.2%) and Tyson Foods (TSN -0.0%) had previously settled price fixing lawsuits for $107M and $221.5M, respectively.

“Today’s guilty plea demonstrates our unwavering commitment to prosecuting companies that violate the nation’s antitrust laws, especially when it involves something as central to everyday life as the food we eat,” Richard Powers, Acting Assistant Attorney General of the Department of Justice’s Antitrust Division, said as of the settlement with Pilgrim’s Pride.

The government has been particularly aggressive in taking action against alleged price fixing in the food industry under the Biden administration. For example, Cargill, Tyson Foods, JBS SA (OTCQX:JBSAY), and National Beef Packing Co were all accused of profiteering unduly from price hikes in 2021 while Hormel (HRL) and Smithfield faced similar allegations in pork processing.

Earlier this year, the administration also pledged to enforce competition laws and crack down on price gouging. This case appears to be a key indication of the administration’s promise to aggressively enforce these principles.

Comments

[jthj]

Not guilty!