Pilgrim’s Pride to pay $ 110 million settlement in chicken pricing case
Earlier this month, poultry officials were charged with pricing charges in the chicken industry.
It was the second indictment in a Justice Department investigation, and now there has been a major development – in the form of a settlement. According to the New York Times, Pilgrim’s Pride, one of the targets of the investigation, will pay just over $ 110 million in fines. For reference, Pilgrim’s Pride recorded just over $ 3 billion in sales in the first quarter of 2020.
Several years ago, a class action lawsuit was filed against major poultry companies, including Pilgrim’s Pride, Tyson and others, alleging that they were engaged in a conspiracy to artificially inflate the price of broiler chicken ( the variety most commonly sold in the U.S.), although input costs are lower than normal, the DOJ intervened in the lawsuit last year.
Pilgrim’s Pride, which has been majority owned by Brazilian meat giant JBS since 2009, said it agreed to a deal in which the company would pay the Justice Department a $ 110.5 million fine as punishment for fixing the prices. poultry from 2012. to 2019. This was part of a conspiracy plea, according to Reuters.
JBS parent company J&F Investimentos will also pay $ 256 million fines against the Securities and Exchange Commission after pleading guilty to violating the US foreign corrupt practices law; two of its Brazilian leaders have reportedly used US banks and real estate to bribe Brazilian government officials with around $ 150 million for loans. And the company will pay an additional $ 27 million because some of the bribes made the company easier purchase of Pilgrim’s Pride.
And even! Pilgrim’s pride stock prices actually jumped significantly after this news broke. This is partly because the fines are so minimal – it’s a tiny fraction of what Pilgrim’s Pride earns, let alone what JBS earns – and also because the first deal, the pricing regulation, says that the DOJ will not take any action against Pilgrim’s Pride over this pricing scandal.
While all of this was under investigation, the Trump administration has granted over $ 90 million to JBS and its affiliates in aid funding, resulting from the Trump administration’s trade war.
However, there may still be new lawsuits. Several buyers Chicken, including chains like Cracker Barrel, Golden Corral, Boston Market and Wawa have all sued Pilgrim’s Pride and its former CEO, Jayson Penn. The $ 110.5 million settlement could end any further investigation by the government’s antitrust department, but chicken farmers can still be sued by their own customers. Or maybe old clients.