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Chicken industry price-fixing probe expands

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Six more executives and managers were accused of conspiring in a years-long effort to rig bids and fix chicken prices.

By Michael Hirtzer

Federal prosecutors expanded a probe into price-fixing in the U.S. chicken industry, shedding light on the involvement of top producer Tyson Foods Inc., which is cooperating with the investigation.

Tyson delivered a bombshell in June when the company said it was cooperating with the U.S. Justice Department’s investigation. The admission came just after executives at Pilgrim’s Pride Corp., the second-biggest chicken producer, were indicted in the scheme. Left out, however, was how Tyson was involved.

A new indictment, filed in federal court on Tuesday, makes the connection a bit clearer. Six more executives and managers, including two former Tyson workers, were accused of conspiring with the four initially indicted in June in a years-long effort to rig bids and fix chicken prices.

The allegations are the latest legal entanglement for American meat producers over how their products are priced and how workers are treated in the plants that turn animals into food. The industry already has been reeling from Covid-19 outbreaks that shut down slaughter plants and eroded beef, poultry and pork production earlier this year.

Tyson declined to comment on the latest indictment, pointing to a June 10 statement that said it had uncovered information pertaining to the investigation and immediately alerted the DOJ and was applying for leniency in the matter.

While the indictment doesn’t name Tyson, it states that two of the indicted, Timothy Mulrenin and Gary Brian Roberts, worked at “Supplier-3,” a company headquartered in Arkansas -- where Tyson is based in the town of Springdale.

Mulrenin was a director of sales at Tyson prior to moving to Perdue Farms in 2018, while Roberts was a vice president at Tyson prior to joining Case Foods Inc., according to their LinkedIn pages. The indictment also mentioned but did not name two additional employees at Supplier-3.

Pilgrim’s Pride didn’t reply to a request for comment. Perdue declined to comment. The National Chicken Council said it does not comment on legal matters of its members. Mulrenin and Roberts didn’t reply to messages on LinkedIn.

Phone, Texts

Using phone records and text messages, the indictment alleges the two former Tyson employees worked with other poultry companies including Pilgrim’s to fix prices for chicken sold to quick-serve restaurants between 2012 and 2019.

Regarding negotiations over what one restaurant would pay for chicken in 2017, Mulrenin replied to a message inquiring about a cut in prices: “Definitely appears he’s under the impression we all dropped prices more than we did.”

The latest indictment also named William Lovette, who stepped down as CEO of Pilgrim’s in 2019. Jayson Penn, who succeeded Lovette and was first named in the June indictment, left the Greeley, Colorado-based company last month. Penn has pleaded not guilty. Lovette didn’t immediately respond to a message on LinkedIn.

--With assistance from David McLaughlin and Steve Stroth.
© 2020 Bloomberg L.P.
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