Four chicken industry executives including the CEO of one of the country’s top chicken producers were indicted by the Justice Department on Wednesday for allegedly conspiring to fix prices on chickens sold to restaurants and grocery stores.
Chicken industry executives have been busted during the coronavirus pandemic by the Feds for price-fixing over a five-year period. Giphy: happydog @HappydogStickers
Current and former senior executives at Pilgrim’s Pride and Claxton Poultry Farms allegedly fixed prices and rigged bids from 2012 to 2017, the Washington Post reported.
A handful of companies dominate the chicken industry following decades of consolidation. The five largest control 61 percent of U.S. chicken production, according to Watt Global Media, an industry publication. Tyson, the largest, represents 21 percent.
“Executives who cheat American consumers, restauranteurs, and grocers, and compromise the integrity of our food supply, will be held responsible for their actions,” Assistant Attorney General Makan Delrahim said in a press release. “Particularly in times of global crisis, the division remains committed to prosecuting crimes intended to raise the prices Americans pay for food.”
According to the indictment, the following chicken industry leaders have been indicted on anti-trust charges: Jayson Penn (CEO of Pilgrim’s Pride, the No. 2 U.S. chicken producer); Roger Austin (former VP of Pilgrim); Mikell Fries (president of Claxton in Georgia) and Scott Brady (a VP at Claxton).
Wholesale chicken prices rose 11 percent from mid-2012 to the end of 2018 and fell about 27 percent from 2019 to the end of February 2020 as chicken companies upped production and expanded plants, anticipating bigger exports.
Scrutiny of the actions of poultry industry leaders comes at a time when the industry has been hit hard by the coronavirus pandemic. Hundreds of employees have tested positive for coronavirus in poultry processing plants, where people work in close quarters.
In April, the Georgia Department of Public Health reported that 388 of the state’s poultry workers had tested positive for covid-19. That’s about 2 percent of the estimated 16,500 people employed at 14 chicken plants across Georgia, AJC reported.
The overall infection rate for covid-19 is between 1.5 and 3.5.
The poultry industry includes disproportionate shares of lower-income workers, according to a new Kaiser Family Foundation analysis. That means disproportionate health and financial implications for these workers and their communities.
“The data paint a portrait of workers who have limited ability to absorb income decreases, creating disincentives for them to miss work even if they feel ill, and who may face barriers to care due to lack of insurance and immigration-related fears,” KFF reported. “At the same time, a presidential executive order requires meat and poultry processing plants to continue operating, even in the face of outbreaks, in order to prevent disruption in the food supply chain.”
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The offense carries a statutory maximum penalty of 10 years in prison and a $1 million fine.
Shares of Pilgrim’s Price Corp. fell 14 percent on Wednesday on news that Penn was charged. according to Marketwatch.
Social media users had some fun with the news that the Feds are cracking down on Big Chicken. “The fix is in with all the fixins,” one person tweeted.
More indictments are expected.
Read more: How a Top Chicken Company Cut Off Black Farmers, One by One
