June 9, 2022

Shares for US poultry producers like Pilgrim's Pride drop over price fixing allegations

Shares for major US poultry producers such as Pilgrim's Pride fell as former executives of the companies were accused of price fixing allegations, Seeking Alpha reported.

The US government has accused hold five executives, past and present, at major broiler chicken producers for conspiring to price fix broiler chicken products from 2012 to 2019. The court hearing will began on June 13.

Pilgrim's Pride executives were originally charged, as were executives from Tyson Foods, Perdue Farms, Claxton Poultry, Koch Foods, George's Inc, and Case Foods.

Because the case has already been tried twice and both times resulted in a deadlocked jury, the number of defendants has been reduced from ten to five. As a result, only the executives of Pilgrim's Pride and Claxton Poultry Farms remain as defendants. The charges against five executives were dropped "in an effort to streamline the case and conserve the resources of the court, the parties, and the public," according to the US government.

Price fixing lawsuits against Pilgrim's Pride and Tyson Foods were previously settled for US$107 million and US$221.5 million, respectively.

The Biden administration has been particularly aggressive in prosecuting alleged price fixing in the food industry. For example, in 2021, Cargill, Tyson Foods, JBS SA, and National Beef Packing Co were all accused of profiteering excessively from price hikes, while Hormel and Smithfield faced similar allegations in the pork processing industry.

-      Seeking Alpha