- The US Department of Justice reportedly launched a probe Tuesday into claims over whether major chicken producers like Tyson Foods, Pilgrim’s Pride, and Sanderson Farms fixed prices.
- Tyson shares fell as much as 4.2% after Bloomberg reported the DoJ’s probe, citing a court filing.
- Visit Markets Insider’s homepage for more stories.
Shares of the major US chicken processors fell sharply Tuesday afternoon after Bloomberg reported the Department of Justice opened a criminal investigation into claims over whether companies including Tyson Foods, Pilgrim’s Pride, and Sanderson Farms conspired to fix poultry prices.
The probe was disclosed Friday in a court filing in Chicago, where civil lawsuits against more than 12 companies in the industry are pending, Bloomberg reported.
The civil lawsuits allege the poultry processors conspired to raise prices on broiler chickens, Bloomberg found. The companies allegedly “reduced the supply of broiler chickens and then manipulated prices on a weekly benchmark compiled by the Georgia Department of Agriculture,” according to court papers viewed by Bloomberg.
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Tyson and other chicken processors have dealt with other price-fixing allegations in recent years.
The US Securities and Exchange Commission in 2017 concluded after an investigation that it would not recommend enforcement against Tyson, along with other meat industry peers, over antitrust allegations related to price-fixing.
When reached for comment on Tuesday, a spokesperson for Pilgrim’s Pride said the company “strongly denies” allegations of anti-competitive conduct.
“The company welcomes the opportunity to defend itself against these claims through the legal process,” Cameron Bruett, a company spokesperson, said in an emailed statement.
Sanderson Farms released a statement Tuesday acknowledging the DoJ filed a motion on Friday regarding broiler chicken antitrust litigation, but said the company had not been subpoenaed in connection with the investigation.
“The Company continues to believe the civil plaintiffs’ claims as to Sanderson Farms are wholly without merit, and we are committed to defending the case vigorously,” the company said.
A representative for Tyson Foods did not immediately respond to Business Insider’s request for comment.
Tyson shares have proved volatile in recent weeks as a competitor, the plant-based meat company Beyond Meat, has soared since its initial public offering.
Noel White, the company’s chief executive, told investors last week the company was willing to raise its marketing spending to expand into alternative meat. That pushed Beyond Meat’s shares down by 6%, Markets Insider’s Daniel Strauss reported.
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