US chicken executives face prison in Denver price-fixing trial
NEW YORK (BLOOMBERG) – After years of rumours and allegations, Big Chicken is now on trial. A group of 10 executives and employees of top US poultry companies – including two former chief executives – are facing criminal antitrust charges in a trial getting under way this week in Denver.
They face prison and million-dollar fines if convicted for fixing prices and rigging bids over nearly a decade.
The trial, the first to result from a years-long investigation in the US$95 billion (S$128 billion) United States market for chicken, has ensnared affiliates of Pilgrim’s Pride and Perdue Farms among others.
Together, the companies associated supply about a third of the chicken Americans eat. The move comes as the meat industry has been thrust into the spotlight amid soaring prices and after a wave of Covid-19 outbreaks at packing plants.
The Biden administration has signaled it will act aggressively against alleged livestock cartels, charging that antitrust practices have saddled consumers with rising costs at a time when inflation is increasingly becoming a political concern.
Chicken companies are also facing civil cases.
While the US has imposed hefty fines on numerous companies in the last 20 years, the chicken trial is unusual because it’s individuals facing the jury.
More than 30 lawyers and defendants crowded into a federal courtroom in Denver on Monday to select 12 jurors and two alternates.
The jury will be asked to decide whether the executives agreed to coordinate pricing and bids to limit competition.
The defendants, who have all pleaded not guilty, are charged with violating the Sherman Act, a law passed in 1890 to protect consumers and the economy.
In a court filing last week, the defendants said their price discussions weren’t illegal and that the government can’t prove they agreed to participate in a single, overarching conspiracy.
The charges include “a muddle of different sporadic communications over many years involving different people, different products, different customers, and different price outcomes,” the filing said.
Former Pilgrim’s Pride CEOs Jayson Penn and William Lovette face charges they conspired with other industry employees and officials to fix prices and rig bidding from 2012 to early 2019.
In addition to Penn and Lovette, prosecutors charged Roger Austin, a former vice president of Pilgrim’s; Mikell Fries, the president of Claxton Poultry; Scott Brady, a Claxton vice president; Timothy Mulrenin, a Perdue executive who previously worked at Tyson Foods; William Kantola, a Koch Foods sales executive; Jimmie Lee Little, a former Pilgrim’s Pride sales director; Gary Brian Roberts, a Case Farms employee who had previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Greeley, Colorado-based Pilgrim’s Pride, a unit of Brazilian food giant JBS, pleaded guilty to price-fixing conspiracy in February and was sentenced to pay US$108 million in fines.
“Pilgrim’s has resolved this matter with the US Department of Justice and is not a party to the trial, nor are any of the defendants current company employees,” the company said in an emailed statement. “We continue to cooperate with the government and remain focused on maintaining our commitment to fair and honest competition in compliance with US antitrust laws.”
The other associated companies didn’t immediately return emails and phone messages seeking comment.
All the defendants face charges of conspiring to restrain trade. Little is also charged with obstruction of justice for allegedly lying to federal agents.
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