The Justice Department on Wednesday indicted four current and former executives from chicken producers Pilgrim's Pride and Claxton Poultry Farms over allegations of conspiracy to fix prices and rig bids between 2012 and 2017, the first charges in an ongoing antitrust investigation, according to a statement from the agency.
The four executives charged with one-count indictments include Pilgrim's Pride CEO Jayson Penn and former vice president Roger Austin, as well as Claxton Poultry Farms president Mikell Fries and vice president Scott Brady.
The Justice Department launched an investigation into potential price fixing between major poultry producers last year following years of accusations and litigation against producers like Perdue Farms, Sanderson Farms and Tyson Foods.
According to the Wall Street Journal, poultry prices rose 11% between 2012 and 2018, then fell 27% between 2019 and February 2020 due to ramped up production and expansion.
Pilgrim's Pride stock immediately dove after news broke of the indictments, falling 16% before bouncing back up slightly.
Forbes has reached out to Pilgrim's Pride and Claxton Poultry Farms for comment.
17%. That's how much Pilgrim's Pride represents of the greatly consolidated U.S. poultry market, according to the Wall Street Journal.
Market consolidation also proved a liability for poultry and meat producers during the Covid-19 pandemic. Major companies like Tyson and Smithfield Foods have been forced to shut down plants as facilities become sites of outbreaks and workers refuse to clock in, knocking processing capacity down during the pandemic.
Pilgrim's Pride is majority owned by beef and pork processor JBS. The company reported 2019 net income of $456 million off revenue of $11 billion.