Chicken producer execs indicted for alleged price-fixing
Pilgrim's Pride CEO and 3 other chicken producer executives have been indicted over allegations of price-fixing. Yahoo Finance’s Heidi Chung joins Zack Guzman to discuss.
Video Transcript
ZACK GUZMAN: Welcome back to live market coverage here on Yahoo Finance. We are watching shares of Pilgrim's Pride, one of the largest chicken producers here in the United States, off 12% after news broke that its CEO is being indicted for price fixing in the chicken market. Obviously something that we've heard about before. But now, the official news there. And for more on this, I want to get to Yahoo Finance's Heidi Chung for the latest. Heidi.
HEIDI CHUNG: Hey, Zack. Some pretty huge developments when it comes to all those allegations that we have been talking about about a year ago. Four current and former senior execs from two large poultry-producing companies indicted today for their role in a conspiracy to fix prices and rig bids for broiler chickens. Now, just to clarify, broiler chickens are chickens that were raised to be consumed and also sold to grocers and restaurants as well.
The Department of Justice's one count indictment charges current and former senior execs at Pilgrim's Pride and Claxton Poultry Farms. Pilgrim's Pride CEO, like you mentioned, was one of the members that was indicted. Assistant attorney general of the DOJ's antitrust division saying in a statement, quote, "particularly in times of global crisis, the division remains committed to prosecuting crimes intended to raise the prices Americans pay for food. Executives who cheat American consumers, restaurateurs, and grocers and compromise the integrity of our food supply will be held responsible for their actions."
Now, this indictment is a result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anti-competitive conduct in the broiler chicken industry between the years 2012 and 2017. And the DOJ opened a criminal investigation into this allegation June 25 of last year. But these allegations, Zack, like you mentioned, are not new, and at the time, it first cropped up in October of 2016, and since then, a lot of different consumers, grocers, even food companies such as Conagra and Kraft Heinz accused the poultry producers of fixing prices for years.
The indictment does come at a very interesting time, though, because we have been keeping a very close eye on the rising prices of meat here in the US as a result of the COVID-19 pandemic. So certainly, huge news in the industry, and it'll be very interesting to see what the next steps here are.
ZACK GUZMAN: Yeah, and we've also seen lawsuits as well as a DOJ investigation into meat prices as well, so wonder if the spillover might be there from chicken prices also to the meat side. But definitely today bringing a new meaning to the phrase chicken with all the fixings as we highlight that. Heidi Chung, appreciate you bringing us the update on the meat pricing front.
