By Anand Vasu
Pilgrim’s Pride Corporation, better known as Pilgrim’s, one of America’s largest broiler chicken producers, was sentenced to pay $108m in criminal fines after it pleaded guilty to conspiracy to fix prices and rig bids for broiler chicken products, the Department of Justice said in a statement.
The Colorado-based corporation participated in a conspiracy to suppress and eliminate competition for sales of broiler chicken products from 2012 to 2017, according to the plea agreement.
The corporation was the first to be sentenced to pay a criminal fine in an anti trust investigation conducted by the Justice Department. The fine comes on top of hundreds of millions of dollars Pilgrims’ has already paid out in settlements over the years.
The investigation is ongoing, more fines could be expected and at least 10 individuals from the industry had already been charged, officials said.
“The 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,” said Richard Powers, Acting Assistant Attorney General of the Department of Justice’s Antitrust Division. “This guilty plea is a direct result of the tireless efforts of our dedicated career prosecutors and staff, and partners at the FBI, Commerce Office of Inspector General (OIG) and USDA OIG.”
A violation of the Sherman Act carries a maximum penalty of a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The Sherman Antitrust Act, enacted in 1890, outlaws “every contract, combination, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” The act, in combination with Federal Trade Commission Act and the Clayton Act, which came into force in 1914, are the three core federal antitrust laws still in effect.
“This is another example of the FBI’s ongoing work to eliminate bid rigging and price fixing and hold those conducting these activities accountable for their actions,” said Steven M. D’Antuono, Assistant Director in Charge of the FBI Washington Field Office. “These criminal acts cheat American workers and consumers while harming competitive markets. This ongoing investigation has yielded charges against 10 individuals for their efforts to illegally manipulate broiler chicken prices, and the FBI is committed to continuing this important work alongside the Department of Justice and our partners.”
“This investigation demonstrates the government’s resolve to protect the integrity of free and open market competition,” said Peggy E. Gustafson, Inspector General of the Department of Commerce. “When competitor companies conspire to set prices that benefit themselves, American consumers are cheated. We will continue to work with our law enforcement partners to pursue such illegal activity and ensure perpetrators are held accountable.”
The chicken industry at large has been embroiled in a class action lawsuit. Major buyers including Chick-Fil-A and Target Corp. have claimed that poultry companies unfairly fixed prices. Earlier this year Pilgrim’s agreed to pay $75 million to settle with plaintiffs, while Tyson Foods Inc., America’s biggest meatmaker, said it would pay $221.5 million.
This case is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the broiler chicken industry, which is being conducted by the Antitrust Division with the assistance of the U.S. Department of Commerce OIG, FBI Washington Field Office, and USDA OIG.