See Pilgrim’s Pride Is First to Plead Guilty to Chicken Price-Fixing by Michael Hirtzer of Bloomberg News. I will be covering anti-trust laws pretty soon in some of my classes and colluding on prices violates those laws.
"Pilgrim’s Pride Corp., one of the top U.S. chicken producers, has become the first company sentenced to pay a criminal fine as part of an ongoing antitrust investigation into the industry by the Justice Department.
The JBS SA-owned firm pleaded guilty to conspiring with rivals to illegally prop up prices between 2012 and 2017, and will pay $108 million, the Justice Department said Tuesday. That adds to hundreds of millions of dollars in civil settlements that the chicken industry has already made.
The fines and payments are likely not over, a sign that the extreme consolidation that’s occurred in the chicken industry over past decades is starting to exact a cost. The investigation into chicken antitrust is ongoing, the Justice Department said, and 10 individuals at major chicken producers have previously been charged.
The “guilty plea demonstrates our unwavering commitment to prosecuting companies that violate the nation’s antitrust laws, especially when it involves something as central to everyday life as the food we eat,” said Richard Powers, acting assistant attorney general of the DOJ’s antitrust division.
The chicken industry has also been embroiled in a class action lawsuit for years. Major buyers including Chick-Fil-A and Target Corp. have accused poultry companies of fixing prices. Pilgrim’s earlier this year said it would pay $75 million to settle with plaintiffs, while Tyson Foods Inc., America’s biggest meatmaker, said it would pay $221.5 million.
Pilgrim’s said the plea marks the end of the government’s investigation into the company.
The government “will bring no further charges against Pilgrim’s in this matter, provided the company complies with the terms and provisions of the agreement,” said Cameron Bruett, a spokesman for Pilgrim’s."
2 comments:
Do you think this would be a problem if the market had more qualified suppliers? Looks like a few companies have contracts to supply America with chicken and that sounds very lucrative to me.
It is certainly easier to collude the fewer firms there are. But I don't know how many firms are in the market or what their market shares are. Thanks for reading and commenting
Here is an article with some numbers. It looks like there are a fair number of firms but it mostly gives weekly pounds produced and not sales figures (and not for all the firms they mention and it is only through 2015). But I was not having much luck google searching on this.
https://www.wattagnet.com/articles/25893-top---us-chicken-producers-grow-in-new-directions
Here is another one that might be helpful. It seems to show that Tyson's and Pilgrim's combine for over 50% of the market
https://csimarket.com/stocks/competitionSEG2.php?code=TSN
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