Chicken Price-Fixing Case Settles for $110 Million

By:
Chris Gaetano
Published Date:
Oct 14, 2020
Pilgrim's Pride, a major poultry wholesaler accused of orchestrating a price-fixing scheme, has agreed to settle federal charges by paying $110 million, according to the New York Times.

The company, among the largest of its kind in the country, was alleged to have colluded with other wholesalers to subvert the typical bidding process through which grocery stores and restaurants typically buy their meat. For example, one-time executives from Pilgrim called executives from Claxton Chicken after both had submitted a bid for dark meat; the executives told Claxton that Pilgrim was selling its meat for 3 cents more, which then prompted Claxton to raise its prices too. While 3 cents may seem like a small sum, given the scale these wholesalers operate at, even a few cents' difference can add up to hundreds of thousands of dollars extra.

During the time of this scheme, 2012 to 2017, the price of chicken at the consumer level began to slowly rise, as the additional costs were passed on to them. This raised the ire of chicken customers, who had noted that while the price of feed was falling the price of chicken was still rising.

With the $110 million settlement, the U.S. Department of Justice has agreed not to pursue further charges against the company on this matter. The settlement will need to be approved by a federal court in Colorado.

Pilgrim's Pride is only one of several companies whose executives have been indicted for their role in the scheme. Others named include Claxton, Tyson, Purdue, Koch Foods, Case Farms and George's Inc.

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