Executives indicted

Dave Schwarz/Associated Press

This April 28, 2020, file photo shows the Pilgrim's Pride plant in Cold Spring. Minn. A federal grand jury has charged four current and former chicken company executives with price-fixing. The U.S. Department of Justice says the executives from Colorado-based Pilgrim’s Pride and Georgia-based Claxton Poultry conspired to fix prices and rig bids for broiler chickens from at least 2012 to 2017.

By David B. Strickland

Poultry Times editor

dstrickland@poultrytimes.com

DENVER — On June 3 a grand jury in the U.S. District Court in Denver, Colo., returned an indictment on four current and former poultry company executives for what it says is their role in broiler chicken price fixing and rig bidding for product sold primarily to grocers and restaurants, the U.S. Department of Justice announced.

Those indicted include Jayson Penn, president and CEO of Pilgrim’s Pride; Roger Austin, former vice president of Pilgrim’s Pride; Mikell Fries, president and board member of Claxton Poultry; and Scott Brady, Claxton Poultry national accounts sales manager.

On June 8, all four entered not guilty pleas in the Denver U.S. District Court.

In response, Claxton Poultry issued the following statement:

“The allegations attributed to our company are without merit and we intend to vigorously defend our company and its good name as this process moves forward. We will not comment further on the allegations other than to say that since our small start in 1949, we have adhered to the highest standards of food quality, professionalism, integrity and good faith in all our operations.”

Pilgrim’s Pride also issued a statement:

“Today (June 3), Pilgrim’s was informed of an indictment against a current executive and two former Pilgrim’s employees. We take this matter very seriously. The company is committed to high ethical standards, governance, and free and open competition that benefits both customers and consumers.

“Pilgrim’s will continue to fully cooperate with the Department of Justice in their investigation.”

The DOJ announced that the one-count indictment against those mentioned stemmed from an allegation of price fixing and rigged bids of broilers from approximately 2012 to 2017.

“Particularly in times of global crisis, the division remains committed to prosecuting crimes intended to raise the prices Americans pay for food,” said Assistant General Makan Delrahim of the Department of Justice’s Antitrust Division, in a DOJ release. “Executives who cheat American consumers, restauranteurs and grocers, and compromise the integrity of our food supply, will be held responsible for their actions.”

“Rigging bids and fixing prices hurts consumers and undermines our economic system,” Peggy E. Gustafson, inspector general of the Department of Commerce, said in a statement. “We are committed to working with our law enforcement partners to root out those who take advantage of the American public’s trust.”

Timothy R. Slater, assistant director in charge of the Federal Bureau of Investigation’s Washington field office, added, “The FBI will not stand by as individuals attempt to line their pockets while hard-working Americans and restaurant owners are trying to put food on their tables.”

The DOJ notes that this charge carries a maximum penalty of a $1 million fine and 10 years in prison.

The department also added that “an indictment alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.”

“Ensuring the integrity of competition in agricultural markets in order for producers to receive competitive prices for their products, and to prevent consumers from being cheated, is of the utmost importance to USDA OIG, and we will continue to dedicate resources to the investigation of matters involving such potential of competitive harms,” said Bethanne M. Dinkins, special agent in charge with the USDA Office of Inspector General (OIG), in a release.

Claxton Poultry, based in Claxton, Ga., began in 1949 and has grown to an operation with 2,000 employees that sells approximately 300 million pounds of chicken a year to about 750 customers ranging from local restaurants to national ones like Chick-fil-A, the company notes.

Pilgrim’s Pride, based in Greeley, Colo., is a division of JBS USA, which is the U.S. segment of Brazilian meat production company JBS SA. Pilgrim’s reported net sales of $3 billion for the first quarter of 2020. Pilgrim’s has about 58,600 employees and operates facilities in 14 states, Puerto Rico, Mexico, the United Kingdom and Europe. Its distribution of product is primarily through foodservice distributors and retailers, the company said.

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