Justice Department Obtains Indictment Against Four Senior Executives for Price-Fixing and Bid-Rigging in Broiler-Chicken Market

On June 3, the U.S. Department of Justice announced that it had obtained an indictment against four current and former senior executives from two major broiler chicken producers, for conspiring to fix prices and rig bids for broiler chickens under section 1 of the Sherman Act.  (Broiler chickens are chickens raised for human consumption and sold to grocers and restaurants.)

According to the indictment in this case, from at least as early as 2012 until at least early 2017, two executives of a Colorado-headquartered chicken supplier — Jayson Penn, the President and Chief Executive Officer, and Roger Austin, a former Vice President – and two executives of a Georgia-headquartered broiler chicken producer — Mikell Fries, the President and a member of the board, and Scott Brady, a Vice President – participated in a conspiracy to fix prices and rig bids for broiler chickens across the United States.

The indictment specifically alleged that the four defendants and other unidentified coconspirators participated in a network that they used to pursue the following aims:

  • “to reach agreements and understandings to submit aligned, though not necessarily identical, bids and to offer aligned, though not necessarily identical, prices, and price-related terms, including discount levels, for broiler chicken products sold in the United States”;
  • “to participate in conversations and communications relating to nonpublic information such as bids, prices, and price-related terms, including discount levels, for broiler chicken products sold in the United States with the shared understanding that the purpose of the conversations and communications was to rig bids, and to fix, maintain, stabilize, and raise prices and other price-related terms, including discount levels, for broiler chicken products sold in the United States”; and
  • “to monitor bids submitted by, and prices and price-related terms, including discount levels, offered by, Suppliers and co-conspirators for broiler chicken products sold in the United States.”

It also sets forth sequences of emails that appear to demonstrate ongoing discussions between the defendants relating to pricing for dark chicken meat and wings, and to dark meat and chicken-on-the-bone supplies.  It further alleged the defendants’ discussions of protecting, and thereafter acting to protect, the purpose and effectiveness of the conspiracy, through sequences of emails.

Note: This indictment is noteworthy because these four defendants, in the Department’s words, “are the first to be charged in an ongoing criminal investigation into price fixing and bid rigging involving broiler chickens.”

Because price-fixing and bid-rigging are core criminal violations under the Sherman Act, antitrust compliance officers should brief senior executives in their firms about this indictment, and include information from the indictment in antitrust-compliance training materials.  Those briefing and training materials should include examples of the types of alleged email exchanges between the executives, to show the kinds of words and actions that the Antitrust Division is likely to consider highly probative of executives’ knowledge of and participation in price-fixing and bid-rigging.

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