Pilgrim’s Pride, Tyson Foods to settle broiler chicken antitrust litigation

Pilgrim’s Pride Corp. on Monday revealed an agreement to settle claims in federal litigation by purchasers of broiler chickens alleging violations of antitrust and unfair competition laws.

In litigation alleging a conspiracy to reduce output and increase the prices of broiler chickens, Pilgrim’s Pride has agreed to pay the direct purchaser plaintiff (DPP) class $75 million.

The settlement, which is subject to court approval, will be reflected in the company’s fourth quarter 2020 financial statements, Pilgrim’s Pride said in a regulatory filing.

Pilgrim’s Pride is one of more than a dozen producers sued in 2016 in purported class action lawsuits styled as “In re Broiler Chicken Antitrust Litigation” in the U.S. District Court for the Northern District of Illinois. The agreement announced Monday doesn’t settle claims outside the DPP class, Pilgrim’s noted in the 8-K Securities and Exchange Commission filing.

“While Pilgrim’s does not admit any liability for the claims alleged in the Broiler Antitrust Civil Litigation, it believes a settlement was in the best interests of the company and its shareholders,” the filing added.

Separately Monday, in the same litigation, DPPs notified the court that they reached an agreement with Tyson Foods Inc. and related entities to settle all claims against Tyson. The agreement also is subject to court approval.

“Tyson Foods has reached an agreement in principle to settle a class action lawsuit alleging price fixing filed against Tyson and other poultry companies by entities representing direct purchasers of broiler chicken products,” Gary Mickelson, a Tyson spokesman, said in an email. “Tyson believes the resolution is in the best interests of the company and its shareholders and the settlement does not constitute an admission of liability.”

Neither Tyson nor the plaintiffs’ court filing disclosed the terms of the agreement in principle. Plaintiffs’ attorneys stated in the filing “plaintiffs will move for preliminary—and, ultimately, final—approval of a proposed settlement in the near future.”

Clifford Pearson, a lawyer representing the DPPs, declined to comment on the agreements involving Pilgrim’s Pride and Tyson.

Pilgrim’s Pride announced the settlement just a few months after entering a plea agreement with the U.S. Department of Justice (DOJ) related to an ongoing government antitrust probe into the sale of broiler chicken products, which are sold to grocers and restaurants. Under the agreement, which Pilgrim’s announced Oct. 13, the company agreed to plead guilty to one count of conspiracy in restraint of competition involving sales of broiler chicken products in violation of the Sherman Antitrust Act and pay a fine of $110.5 million.

DOJ previously announced several more individuals had been charged in an alleged conspiracy to fix prices and rig bids for broiler chicken products.