US poultry price-fixing trial begins

Antitrust issues in the broiler chicken industry will be in the spotlight as a criminal trial of former poultry executives charged with fixing prices begins in Denver, Colorado.
calendar icon 27 October 2021
clock icon 3 minute read

Four former chicken industry executives, including former Pilgrim’s Pride CEO Jayson Penn, are facing felony price-fixing charges in court. Evidence from the prosecution is expected to show phone records, online communications and text messages that proves the four executives violated the Sherman Act of 1890, the primary anti-monopoly law in the US.

The current case is associated with a broad 2019 investigation from the US Department of Justice into the meat industry’s alleged antitrust violations. Penn and two other executives are the first to stand trial for criminal price-fixing charges. They have been fighting the case for two years.

The case uses the Sherman Act of 1980 to address the alleged price-fixing. The law, which was amended and ratified in 1914, foresaw price-fixing in the meatpacking industry and outlined criminal penalties to prevent the practice. If a defendant is convicted, the law dictates a maximum prison sentence of ten years and a fine of $1 million for individuals, or $100 million for corporations. Or twice the profits from the crime or twice the victims’ loss – whichever is more costly.

Executives often accept plea bargains when faced with antitrust allegations. The current criminal trial in Denver is notable because if a jury reaches any guilty verdicts for the executives, the judge will have an opportunity to use the sentence as a way of deterring future price-fixing schemes. It will also put corporate boards and investors on notice: high profits stemming from price-fixing cannot keep influencing industry standards or investor expectations.

Read a more in-depth analysis of the trial in Forbes.

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