REUTERS / Jonathan Ernst
The Department of Justice handed down an indictment to several executives in the poultry industry today, alleging price fixing, according to a court document first reported by The Wall Street Journal.
The one-count indictment alleges the current CEO of Pilgrim’s Pride, as well as three other current and former executives from Pilgrim’s and Claxton Poultry Farms, fixed chicken prices that were sold to grocery stores and restaurants from 2012 to 2017.
News of the indictment led poultry stocks like Pilgrim’s Pride, Tyson Foods, and Sanderson Farms lower, while food distributors including Sysco and US Foods moved higher.
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Several stocks are on the move this afternoon after the Department of Justice handed down a one-count indictment alleging four current and former poultry executives fixed chicken prices, The Wall Street Journal first reported on Wednesday.
Jayson Penn, the current CEO of Pilgrim’s Pride; Roger Austin, a former vice president of Pilgrim’s; Mikell Fries, the president of Claxton Poultry Farms; and Scott Brady, a vice president of Claxton, were all formally charged with fixing the price of chicken that was sold to restaurants and grocery stores from 2012 to 2017.
The Justice Department originally opened its criminal investigation into alleged chicken price fixing at Pilgrim’s and Tyson Foods in June 2019.
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The announcement led poultry producer stocks lower on Wednesday afternoon.
Shares of Pilgrim’s Pride fell as much as 16%, Tyson fell as much as 7%, and Sanderson Farms dropped as much as 14% in afternoon trading.
News of the DOJ indictment had a positive impact on two stocks: Sysco and US Foods.
Both food distributors filed a lawsuit in 2018 alleging that Tyson Foods, Pilgrim’s Pride, Sanderson Farms, and Perdue Farms conspired together to inflate chicken prices.
Investors are bidding up shares of Sysco and US Foods on the prospect that they may benefit in the form of a settlement with or damages from the chicken-producing companies.
US Foods jumped as much as 8% to $21.41 on the news on Wednesday, while Sysco rose as much as 5% to $59.65.