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Chicken processor Pilgrim’s Pride has egg on its face.
Pilgrim's, the second-largest chicken processor in the U.S., has entered into a plea deal with the Justice Department to resolve allegations of price-fixing and bid-rigging.
The journey began in June when the Justice Department filed charges against multiple chicken executives including Pilgrim's then CEO Jayson Penn (he has since flown the coop).
The Feds were investigating a pervasive and coordinated effort to suppress competition in the $65 billion U.S. chicken industry from 2012 to 2019.
- Specifically, prosecutors alleged that when chicken salespeople were negotiating supply deals with restaurants and supermarket chains, they would compare notes with one another and conspire to edge prices higher.
- The apparent collusion allowed the nation’s largest chicken sellers to inflate prices for buyers including Walmart, Kroger, Popeyes, and KFC.
Pilgrim's has agreed to a $110 million fine to settle the charges. But the investigation is far from over - the Feds continue to look into a number of alleged bad eggs at Tyson Foods, Perdue Farms, and Koch Foods.
And chicken is not the only item on the menu. The Justice Department is pursuing antitrust investigations across many food groups:
- Bumble Bee and StarKist pled guilty and were fined earlier this year for fixing the price of canned tuna.
- Beef companies are also under the microscope due to the large discrepancy between falling livestock prices and the high wholesale cost of beef during the pandemic. No charges have yet been brought.
The Takeaway: The chickens have come home to roost.