On June 3, four former and current CEOs of chicken processing companies were indicted by the Department of Justice for working together to fix broiler chicken prices. Pilgrim’s Pride’s current CEO, Jayson Penn, and former VP Roger Austin were charged, along with the President and Vice President of Claxton Poultry, Mikell Fries and Scott Brady. According to prosecutors, the charged men communicated via text messages and phone calls about raising prices for the chickens, which are typically sold to restaurants and consumers.
The indictment alleges the period of illicit activity occurred from 2012 until at least 2017, but prosecutors noted the timing of the charges comes shortly after meatpacking plants were closed for the coronavirus. After meat processing CEOs warned that COVID-19 plant closures could lead to a shortage of meat products, President Trump invoked the Defense Production Act to order affected plants to reopen.
“Particularly in times of global crisis, the [antitrust] division remains committed to prosecuting crimes intended to raise the prices Americans pay for food,” said Assistant Attorney General Makan Delrahim of the Department’s Antitrust department.
The indictment, which the Department says are the first of an ongoing investigation, cites phone records and text messages allegedly exchanged between the defendants that consisted of Brady informing Fries that Austin had asked Claxton Poultry to raise its prices. Fries allegedly responded, “Tell him we are trying!”
The investigation, conducted by the Justice Department and assisted by the FBI and Commerce Department, comes amid increasing scrutiny into how meatpackers have set prices during the coronavirus pandemic. In May, the attorneys general of 11 states wrote Attorney General William Barr to investigate the “highly concentrated” beef production industry.
“The disparity between the price of live weight cattle and the retail cost of boxed beef sold to consumers is a sign of a market that lacks full and fair competition,” the attorneys general wrote. The Justice Department
The charged poultry executives, if convicted, could each face up to 10 years in prison. The charges also come with a fine, which, depending on the amounts of losses inflicted on consumers by the fixing or the amount gained by the conspirators, could go higher than a million dollars. The men will appear before a Denver federal court June 4.
