Pilgrim’s Pride And Tyson Foods Being Probed For Price Fixing In Florida

Pilgrim’s Pride and Tyson Foods have disclosed that the attorney general of the U.S. state of Florida has demanded information from them in regards to a probe being conducted over possible anticompetitive behavior. This follows civil lawsuits which were filed in a Chicago federal court accusing Tyson Foods and other processors of chicken of engaging in a price-fixing conspiracy.

“We continue to believe the antitrust claims that prompted the Florida AG to open this investigation are without merit but we are cooperating with the Florida AG’s investigation,” said a spokesperson for Tyson Foods, Gary Mickelson.

Georgia Dock pricing index

Tyson Foods disclosed that the information that the Florida AG’s office had requested pertained to Georgia Dock. This is a chicken products pricing index which used to be published the Agriculture Department of Georgia. The pricing index was, however, suspended in 2016 by state officials after concerns were raised that it was prone to manipulation by chicken firms. Besides Tyson Foods, information concerning the index has also been requested from Sanderson Farms.

A spokesperson for Pilgrim’s Pride, Cameron Bruett, also disclosed that the chicken meat processor had received an inquiry from the attorney general of Florida. Pilgrim’s Pride is owned by JBS SA, a Brazilian meatpacker.

Antitrust violations

In the past one year the chicken industry in the United States has faced increased scrutiny as farmers and customers have alleged antitrust violations which relate to compensation, production and pricing. A few big firms dominate the chicken sector in the U.S.

The request by Florida’s AG comes a few months after Tyson Foods revealed that it had been subpoenaed by the U.S. Securities and Exchange Commission. At the time Tyson Foods said that it was of the view that the SEC subpoena had something to do with price-fixing allegations.

Earnings decline

Information on the Florida probe also comes hot on the heels of Tyson Foods releasing its financial results for its most recent quarter. On Monday the meat processor disclosed that its earnings had fallen by 29% as traffic to restaurants recorded a decline. As a result of this, processed meats and pizza toppings from Tyson Foods were not moving as fast. The fall in earnings was also blamed on fires that occurred at two of the company’s poultry plants since sales declined as a result.

In a bid to revitalize its business, Tyson Foods is betting on the business of prepared foods which is not as susceptible to market swings as meatpacking.

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