Georgia poultry executives indicted in feds’ price fixing case

Chickens are processed at the White Oak Pastures processing plant in Bluffton, Ga., on July 20, 2012. BRANT SANDERLIN / BSANDERLIN@AJC.COM
Chickens are processed at the White Oak Pastures processing plant in Bluffton, Ga., on July 20, 2012. BRANT SANDERLIN / BSANDERLIN@AJC.COM

Two executives from a Georgia-based poultry company were indicted for allegedly conspiring to fix prices for broiler chickens, the Justice Department announced Wednesday.

Mikell Fries and Scott Brady, president and vice president of Claxton Poultry Farms, were among four poultry industry officials each charged by a federal grand jury in Denver with one count of conspiracy to restrain trade.

The indictment also names Jayson Penn, CEO of Colorado-based poultry giant Pilgrim's Pride Corp., and his former deputy Roger Austin, who resides in Carroll County in Georgia.

The charges allege the executives fixed prices and rigged bids to suppress competition for broiler chickens sold to restaurants and grocery stores from at least 2012 to 2017.

Claxton Poultry declined to comment, and Fries and Brady could not immediately be reached. A spokesperson for Pilgrim’s Pride, the country’s second-largest poultry producer, did not respond to a request for comment.

“Particularly in times of global crisis, the (Justice Department’s Antitrust) division remains committed to prosecuting crimes intended to raise the prices Americans pay for food,” said Makan Delrahim, assistant attorney general for the division. “Executives who cheat American consumers, restaurateurs, and grocers, and compromise the integrity of our food supply, will be held responsible for their actions.”

The executives are the first people charged in an ongoing federal investigation into price fixing, bid rigging and other anti-competitive practices in the chicken industry. Other than the Justice Department, also involved were the FBI, the Agriculture Department and the Commerce Department.

This April 28, 2020 file photo shows the Pilgrim’s Pride plant in Cold Spring. Minn. A federal grand jury has charged four current and former chicken company executives with price-fixing. (Dave Schwarz/St. Cloud Times via AP)
This April 28, 2020 file photo shows the Pilgrim’s Pride plant in Cold Spring. Minn. A federal grand jury has charged four current and former chicken company executives with price-fixing. (Dave Schwarz/St. Cloud Times via AP)

Restaurant companies, food distributors and some of the country’s largest grocery stores, including Walmart and Kroger, have filed price-fixing lawsuits against large poultry producers in recent years.

The Justice Department intervened in one class-action suit last year filed by the food service company Maplevale Farms. The case alleges that Tyson Foods, Pilgrim’s Pride and other major chicken companies that control the vast majority of the market colluded to inflate the price of broiler chickens, including by limiting production.

The poultry companies have denied wrongdoing and are fighting the suits.

Wholesale chicken prices rose 11% between mid-2012 and late 2018, according to The Wall Street Journal. Chicken companies say rising chicken consumption in the U.S. and abroad drove the prices higher, not industry scheming.

Broiler chickens are a sizable part of Georgia's economy. They are the state's top agricultural commodity, valued at roughly $4.5 billion in 2020, according to the University of Georgia's Center for Agribusiness and Economic Development. Georgia was the country's top producer of such poultry in 2018, according to the National Agricultural Statistics Service.

The 71-year-old Claxton Poultry, headquartered roughly 20 miles southwest of Statesboro, says it sells roughly 300 million pounds of chicken a year to 750 customers, including Chick-fil-A. It employs nearly 2,000 people.

Pilgrim’s Pride, meanwhile, makes up some 17% of the U.S. poultry market, according to the Journal. It has several processing facilities across north Georgia.

The charge facing Fries, Brady, Penn and Austin carries a maximum statutory penalty of 10 years in prison and a $1 million fine.