- Tyson Foods announced it is fully cooperating with the Department of Justice's price-fixing investigation into the chicken industry under the antitrust division's Corporate Leniency Program.
- The leniency program allows for a company who comes forward to avoid criminal convictions, criminal fines and prison time if they meet the requirements. The company, which needs to admit to a criminal violation of antitrust laws and cooperate fully, can also obtain limits on monetary damages it may need to pay in civil court.
- Tyson's CEO Noel White told Food Dive in an email that the company took "immediate action" in reporting the wrongdoing they discovered. "The behavior set out in the indictment does not reflect the values of Tyson Foods," White said.
By helping the Justice Department expose antitrust efforts among its competitors in the chicken industry, Tyson is avoiding the serious repercussions that other poultry suppliers could now face.
Tyson said in a release that on April 26, 2019, the company was served with a grand jury subpoena from the DOJ's antitrust division about a criminal antitrust investigation into the broiler chicken industry. The company said when it uncovered information in connection with that probe, Tyson quickly self-reported to the DOJ.
News of Tyson's cooperation comes only one week after the first charges were filed in the ongoing investigation into the chicken industry. Current and former top executives at Pilgrim’s Pride and Claxton Poultry Farms were indicted for conspiring to fix prices for chickens sold to grocers and restaurants from 2012 to 2017. Those four executives now face a statutory maximum penalty of 10 years in prison and a $1 million fine if convicted. They have already pleaded not guilty on the charges and a jury trial is expected to start in August.
In the indictment, the Justice Department said chicken company executives and employees discussed details about their pricing in phone calls and text messages for years while they were simultaneously negotiating supply deals with retailers and restaurants, The Wall Street Journal reported.
It makes sense that Tyson would want to move quickly to protect itself in the investigation. The company is the largest meat producer by sales in the U.S., processing about one in every five pounds of chicken, beef and pork in the country.
The DOJ's investigation into the chicken industry was publicly disclosed last year when it intervened in a lawsuit filed in 2016. The lawsuit accused companies, including Pilgrim's Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of colluding to inflate broiler chicken prices. The DOJ intervened so they could gather evidence and protect a grand jury’s probe. Analysts told Food Dive after the intervention last year that the government was likely on the brink of bringing criminal charges, and with Tyson's cooperation, the first indictments were filed.
Price-fixing accusations against chicken processors have been mounting for years. Poultry companies have faced several similar lawsuits, as well as an investigation by the U.S. Securities and Exchange Commission and the scrapping of the controversial Georgia Dock price index in 2017.
This latest chicken probe isn't the only antitrust investigation currently facing the meat industry either. The USDA is also investigating why a rise in beef prices during the pandemic didn't convert to higher cattle profits for farmers, and the DOJ recently issued subpoenas to major beef and pork producers Tyson Foods, JBS SA, Cargill and National Beef after facing pressure from cattle associations, senators and some state attorneys general. Over the weekend, a class action lawsuit was also filed in Minnesota that accuses those same four meatpackers of conspiring to artificially increase the price of beef.
Tyson's cooperation in the chicken case could help the company as the meat industry is facing an especially tumultuous time with safety concerns at its factories as thousands of workers have tested positive for coronavirus and some have died. A lawsuit has already been filed against Tyson by the family of an employee who worked at the company's meat processing plant in Amarillo, Texas and allegedly contracted coronavirus and died.
From worker safety accusations to antitrust investigations, Tyson and other meat producers may be looking to make more moves to protect themselves as scrutiny in the meat industry only continues to escalate.