Broiler Conspiracy Trial Date Set
Food Company Execs Indicted in Broiler Conspiracy Set for Trial Next Fall
LINCOLN, Neb. (DTN) -- Koch Foods Inc. and four Pilgrim's Pride Corp. executives charged for their role in an alleged nationwide broiler chicken price-fixing conspiracy, are set to go to trial near the end of 2022.
In July, a federal grand jury in Denver handed down an indictment of Park Ridge, Illinois-based Koch Foods, as well as Pilgrim's Pride executives Jason McGuire, a former executive vice president of sales for prepared foods; Timothy Stiller, a former general manager of fresh food services and small bird de-bone; Wesley "Scott" Tucker, a national accounts sales executive; and Justin Gay, director of fresh food service sales.
The U.S. District Court for the District of Colorado scheduled a 15-day trial starting on Oct. 31, 2022, according to a court order. A pre-trial court hearing is set for Sept. 30, 2022. The defendants in the case will have until Aug. 1, 2022, to file any pre-trial motions.
In February 2021, Pilgrim's Pride admitted to its role in a conspiracy to fix broiler chicken prices starting in 2012 and will pay a $107.9 million fine as part of a plea agreement entered in federal court.
The indictment alleges the defendants conspired to suppress and eliminate competition for sales of broiler chicken products, which are chickens raised for human consumption and sold to grocers and restaurants.
Koch's Senior Vice President William Kantola is among 10 people indicted in October 2020 for their roles in the alleged conspiracy. On May 19, 2021, a grand jury returned an indictment against Claxton Poultry for its role in the same alleged conspiracy.
Koch Foods, McGuire, Stiller, Tucker and Gay have been charged with a violation of the Sherman Antitrust Act, according to the indictment.
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Violations of the Sherman Act carry a maximum penalty of 10 years in prison and a $1 million fine for individuals, $100 million fine for corporations.
Back in June 2020, a grand jury indicted Jayson Penn, president and CEO of Pilgrim's Pride, along with Roger Austin, a former vice president of Fresh Foodservice at Pilgrim's Pride Inc. Also indicted were executives for Claxton Poultry Farms in Georgia, including Mikell Fries, president of Claxton Poultry Farms and grandson of the company's founder, along with Scott Brady, vice president of national accounts for Claxton Poultry Farms.
The indictment alleged the price fixing goes back to at least 2012 and points to repeated text communications among Austin, Brady and Fries over bids and prices for poultry contracts or overall market prices. The texts also repeatedly reference communications back to Penn. Those communications for bids on prices continued repeatedly until at least 2017.
The indictment also cited conversations over how to treat competitors who are short on product for delivery and competitors selling chicken products for lower margins. Penn noted in a series of emails regarding one unnamed competitor, "So in essence they are cheap and to add insult to injury are short product."
The indictment stated the business practices of the four executives "substantially affected interstate trade and commerce."
The DOJ filed the indictment with an antitrust class-action civil case in federal court in Illinois that was initially filed in 2016.
About 50% to 70% of broilers are sold under contract with a customer, about 10% to 20% are sold on the spot market, and roughly 17% to 20% are exported, according to the U.S. Poultry and Egg Association.
Read more on DTN:
"Pilgrim's Pride Reaches Settlement,"
"Pilgrim's Pride Fined $107.9 Million,"
"New Indictments in Broiler Conspiracy,"
Todd Neeley can be reached at todd.neeley@dtn.com
Follow him on Twitter @DTNeeley
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