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03/31/2022

2nd Poultry Price-Fixing Trial Ends in Mistrial

DOJ pushes for 3rd trial against industry execs from Tyson, Pilgrim’s Pride, Perdue Farms
Marian Zboraj
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2nd Poultry Price-Fixing Trial Ends in Mistrial
The DOJ alleges that poultry executives fixed prices and rigged bids for broiler chickens sold to grocery stores.

A mistrial was declared on March 29 in the second trial concerning the involvement of 10 poultry industry executives in an alleged scheme to fix prices and rig bids for chickens sold to grocery stores and restaurants.

The defendants in the trial were Jayson Penn, former CEO of Pilgrim’s Pride Corp.; Bill Lovette, former president and CEO of Pilgrim’s Pride, who was succeeded by Penn; Roger Austin, former VP of Pilgrim’s Pride; Mikell Fries, president, and Scott Brady, VP of national accounts, at Claxton Poultry; Timothy R. Mulrenin, director of national account sales at Perdue Farms and a former sales executive at Tyson Foods Inc.; William Kantola, VP of foodservice at Koch Foods Inc.; Jimmie Lee Little, former sales director at Pilgrim’s Pride; Gary Roberts, VP of sales and marketing at Case Farms; and Rickie Blake, a director and manager at George’s Inc.

The case stems from a U.S. Department of Justice (DOJ) indictment that charged the executives with criminal violations of the Sherman Act, which prosecutors alleged occurred as part of a scheme that purportedly lasted from 2012 to 2019 to fix prices and rig bids for broiler chickens — a $28 billion-per-year industry in the United States. According to prosecutors, the executives kept in close contact through text message, phone and email to coordinate bids made to restaurants, grocery stores and buying co-ops.

Greeley, Colo.-based Pilgrim’s Pride, a unit of Brazilian food giant JBS SA, already pleaded guilty in October 2020 to “a conspiracy to suppress and eliminate competition,” and paid $107 million in a settlement with the DOJ over price-fixing charges. 

JBS said that Pilgrim’s Pride has resolved the issue with the government and that JBS is not a party in the current trial. “We continue to cooperate with the government and remain focused on maintaining our commitment to fair and honest competition in compliance with U.S. antitrust laws,” a JBS representative said. 

This latest antitrust case ended in a mistrial after jurors deadlocked and were unable to reach a verdict against any of the poultry executives, following a six-week jury trial before Chief Judge Philip A. Brimmer in the U.S. District Court for the District of Colorado. In December 2021, the first mistrial was declared by Judge Brimmer when jurors deadlocked after a seven-week trial.

In a note to Judge Brimmer after the first trial, jurors said: “[W]e cannot reach consensus on the defendants. Furthermore, we cannot reach consensus on whether there was an overarching conspiracy. After multiple votes, we cannot reach unanimity on a single defendant.”

A new trial is set for June 6 in response to the DOJ’s request to retry the case for the third time. Judge Brimmer ordered Jonathan Kanter, head of the DOJ’s Antitrust Division, to meet with him next week, noting, “If the Government thinks that the 10 defendants and their attorneys and my staff and another group of jurors should spend six weeks retrying this case after the Government has failed in two attempts to convict even one defendant, then certainly Mr. Kanter has the time to come to Denver and explain to me why the Department of Justice thinks that is an appropriate thing to do.”

In September 2021, the Biden administration created waves in the meat and poultry industry by linking meat prices set by protein companies to higher food costs in the marketplace. As a result, the White House said that it would take “bold action” to enforce antitrust laws and crack down on illegal price fixing. 

Earlier this year, JBS settled a lawsuit brought against the company and three other “Big Meat” processors by a group of grocers and wholesalers. The plaintiffs argued that JBS, Tyson Foods, Cargill and National Beef manipulated the cattle supply to drive up beef prices. Although JBS agreed to a $52.5 million settlement, the company did not admit liability in price fixing. Spokeswoman Nikki Richardson said that the agreement was “in the best interest of the company.”

The poultry price-fixing case is U.S. v. Penn et al., case number 1:20-cr-00152, in the U.S. District Court for the District of Colorado.

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