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Tyson being investigated for price fixing allegations


USAgNet & News Staff - June 26, 2019

WASHINGTON, D.C. - The Justice Department on Friday intervened in a class-action lawsuit that claims some of the biggest American poultry companies, including Tyson Foods and Pilgrim’s Pride, conspired to manipulate chicken prices.

The filing itself isn't a guarantee the government will bring charges, but it does suggest that the government is strongly considering them.

Claims of price-fixing by the chicken producers have been a constant over the years, but the government’s involvement is a significant development because it means criminal charges could follow.

"We are aware of the Department of Justice's request, which does not change our view that there is simply no merit to the allegations that Tyson Foods colluded with competitors. We remain committed to vigorously defending ourselves against these baseless allegations," Tyson said in a statement to CNBC.

Shares of Tyson and two other chicken producers fell on Tuesday after news that the U.S. Department of Justice is looking into potential price-fixing accusations. The stock dropped more than 3% on the news and closed down 1.05%.

According to news reports, a large part of the lawsuit revolves around Agri Stats, a subscription service that documents production practices across the chicken industry. According to the suit, the chicken companies shared detailed information with Agri Stats, from age of flocks to operating profits.  While the data was  anonymous, the numbers provided the basis to determine the number of birds competitors were hatching - opening up allegations of  manipulating the supply of broiler chickens and manipulating prices. 

Based in Illinois, Agri Stats calculates customized reports for customers in the chicken, turkey, commercial egg, and swine industries; both domestically and internationally. 

CNBC reports that the criminal investigation also includes chicken producer Pilgrim's Pride and Sanderson Farms, according to Bloomberg, which first reported the probe. Pilgrim's Pride stock fell 1.25% and Sanderson dropped 2.22% on the news.

The DOJ intervened in a civil case against more than a dozen companies  being charged of conspiring "to fix, raise, maintain, and stabilize the price" of broiler chicken as far back as 2008, according to the complaint.

"Pilgrim's strongly denies any allegations of anti-competitive conduct. The company welcomes the opportunity to defend itself against these claims through the legal process," a spokesperson for Pilgrim's Pride told CNBC.

"Sanderon Farms has not been subpoenaed in connection with the Department of Justice investigation," Sanderson Farms said in a press release Tuesday. "The company continues to believe the civil plaintiffs' claims as to Sanderson Farms are wholly without merit, and we are committed to defending the case vigorously."



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