On Thursday, May 20th, the U.S. Department of Justice (DOJ) indicted Claxton Poultry Farms Inc. on a charge of price-fixing. The case arises from the previous indictments of Mikell Fries, President and Scott Brady, Vice-president in a conspiracy to rig prices extending from 2012 through 2019. According to court records, Fries and Brady colluded with managers, since dismissed by Pilgrim's Pride and criminally charged by the DOJ, to collude on price bidding. In February 2021 Pilgrim's Pride Corp., a public- quoted subsidiary of JBS S.A. pleaded guilty to federal charges of conspiracy and paid $108 million in penalties, conceding collusion with Claxton Poultry Farms.
In commenting on the Wednesday, May 19th indictment, Richard Powers, Acting Assistant Attorney General of the DOJ Antitrust Division stated, "as this charge shows we will not hesitate to prosecute crimes designed to put money in corporate coffers and line executives' pockets at the expense of everyday Americans including the hundreds of millions of us who rely on chicken to be an affordable staple food".
Claxton Poultry was founded by Norman W. Fries in the 1930's and operates under family ownership. The company located in Claxton, GA is ranked approximately 20th among broiler producers and processes in excess of 2.5 million broilers each week. It is inexplicable how Claxton Farms could have influenced national prices materially by colluding with Pilgrim's Pride Corp. that has a broiler output twelve to thirteen times that of Claxton. It is possible that in the approximately 13 million documents in the possession of the DOJ there may be evidence of more extensive industry collusion. Tyson Foods independently determined irregularities conducted by employees in marketing chicken and settled with the DOJ. The Company terminated those responsible who were subsequently indicted.
The indictment noted "Claxton participated in a continuing network of supplies and co-conspirators, an understood purpose of which was to suppress and eliminate competition through rigging bids and fixing prices and price-related terms for broiler chicken products sold in the United States". If convicted, Claxton may be subject to a maximum fine of $100 million although this may be increased if documentation shows that the company derived excessive benefit from their activities. Penalties paid by Tyson Foods, Pilgrim's Pride Corp. and civil settlements by these integrators and also by Fieldale Farms have amounted to hundreds of millions of dollars. Defendants in the civil case encompass almost the entire the entire chicken industry in addition to AgriStats Inc. that published benchmark production parameters and costs that Plaintiffs maintain were used by integrators in some form of indirect collusion. This contention has yet to be validated but will be the subject of evidence in upcoming trials.