Mistrial Declared in Poultry Price-Fixing Case Against 10 Industry Execs

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LINCOLN, Neb. (DTN) -- A federal judge in Denver declared a mistrial on Thursday after a jury failed to reach a verdict in a trial of 10 poultry company executives accused of allegedly conspiring to fix broiler prices and rigging bids.

The criminal trial held in the U.S. District Court for the District of Colorado was the first after ongoing federal investigations into the poultry industry.

Bloomberg reported this week the judge in the trial that started on Oct. 25 tried to encourage the jurors to keep deliberating, but a verdict could not be reached.

Standing trial were Jayson Penn, former president and CEO of Pilgrim's Pride; Roger Austin, former vice president of Fresh Foodservice at Pilgrim's Pride; Claxton Poultry Farms President Mikell Fries; Scott Brady, vice president of national accounts for Claxton Poultry Farms; along with other poultry company employees Jimmie Little, Timothy Mulrenin, William Kantola, William Lovette, Gary Roberts and Rickie Blake.

A grand jury indicted the employees back in June 2020.

The indictment alleged the price-fixing goes back to at least 2012 and pointed to repeated text communications among Austin, Brady and Fries over bids and prices for poultry contracts or overall market prices. The texts also repeatedly reference communications back to Penn. Those communications for bids on prices continued repeatedly until at least 2017.

The indictment also cited conversations over how to treat competitors who are short on product for delivery and competitors selling chicken products for lower margins. Penn noted in a series of emails regarding one unnamed competitor, "So in essence they are cheap and to add insult to injury are short product."

The indictment stated the business practices of the four executives "substantially affected interstate trade and commerce."

The DOJ filed the indictment with an antitrust class-action civil case in federal court in Illinois that was initially filed in 2016.

About 50% to 70% of broilers are sold under contract with a customer, about 10% to 20% are sold on the spot market, and roughly 17% to 20% are exported, according to the U.S. Poultry and Egg Association.

There are several other similar ongoing cases.

In July 2021, a federal grand jury in Denver handed down an indictment of Park Ridge, Illinois-based Koch Foods, as well as Pilgrim's Pride executives Jason McGuire, a former executive vice president of sales for prepared foods; Timothy Stiller, a former general manager of fresh food services and small bird de-bone; Wesley "Scott" Tucker, a national accounts sales executive; and Justin Gay, director of fresh food service sales.

The Denver court scheduled a 15-day trial starting on Oct. 31, 2022, according to a court order. A pre-trial court hearing is set for Sept. 30, 2022. The defendants in the case will have until Aug. 1, 2022, to file any pre-trial motions.

In February 2021, Pilgrim's Pride admitted to its role in a conspiracy to fix broiler chicken prices starting in 2012 and will pay a $107.9 million fine as part of a plea agreement entered in federal court.

The July 2021 indictment alleges the defendants conspired to suppress and eliminate competition for sales of broiler chicken products, which are chickens raised for human consumption and sold to grocers and restaurants.

Koch Senior Vice President William Kantola is among 10 people indicted in October 2020 for their roles in the alleged conspiracy. On May 19, 2021, a grand jury returned an indictment against Claxton Poultry for its role in the same alleged conspiracy.

Koch Foods, McGuire, Stiller, Tucker and Gay have been charged with a violation of the Sherman Antitrust Act, according to the indictment.

Violations of the Sherman Act carry a maximum penalty of 10 years in prison and a $1 million fine for individuals, $100 million fine for corporations.

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