Pilgrim's Pride CEO Pleads Not Guilty in Poultry Price-Fixing Case
June 04 2020 - 8:15PM
Dow Jones News
By Jacob Bunge and Brent Kendall
The chief executive of Pilgrim's Pride Corp. pleaded not guilty
to federal charges that he conspired to fix chicken prices, while a
judge barred him from contacting poultry buyers allegedly
victimized by the scheme.
Jayson Penn, CEO of the second-largest U.S. chicken processor,
entered the plea in a federal court in Colorado on Thursday. He and
three other U.S. poultry industry executives were indicted
Wednesday by the Justice Department for allegedly coordinating
chicken pricing-strategies in negotiations with restaurants and
other buyers.
"He plans to fight these charges and expects to be fully
vindicated," Michael Tubach, a lawyer for Mr. Penn, said at
Thursday's hearing.
Justice Department lawyers on Wednesday alleged that four
executives of Pilgrim's and Claxton Poultry Farms, a Georgia
chicken supplier, for years coordinated prices, talking by phone
and relaying competitors' pricing to one another via text message.
The government's charges referenced other unnamed executives and
chicken suppliers, suggesting pricing information was shared more
broadly beyond the alleged discussions between Pilgrim's and
Claxton.
Pilgrim's, majority-owned by Brazilian meat conglomerate JBS SA,
said in a statement late Wednesday that the company is continuing
to cooperate with the Justice Department investigation. "The
company is committed to high ethical standards, governance, and
free and open competition that benefits both customers and
consumers," the company said. A Claxton spokesman declined to
comment.
U.S. Magistrate Judge Kristen Mix said at Thursday's hearing
that Mr. Penn can remain free on personal recognizance, and can
travel. She imposed conditions on his actions while he awaits
trial, most notably that he can't contact employees of eight
companies that are customers of Pilgrim's and are alleged victims
of price-fixing by Mr. Penn and co-conspirators. The Justice
Department hasn't named the customers publicly.
Mr. Tubach argued that restricting Mr. Penn's contacts with
customers would make it difficult for him to do his job. Judge Mix
said she sympathized with Mr. Penn's predicament and didn't want to
fully prevent him from being able to work, but she also said courts
routinely bar defendants from contacting parties who could be
witnesses in the case.
"I suggest that Mr. Penn, as a successful CEO, knows very well
how to delegate," Judge Mix said.
The judge also said Mr. Penn couldn't contact price negotiators
at other chicken suppliers who allegedly participated in the price
fixing.
Two other poultry industry executives indicted by the Justice
Department-- Roger Austin, a former Pilgrim's vice president, and
Scott Brady, a Claxton vice president--also pleaded not guilty
Thursday. Mikell Fries, Claxton's president and another alleged
co-conspirator, didn't enter a plea and has another hearing
scheduled for next week.
Lawyers for the defendants weren't immediately available for
comment.
Pilgrim's shares settled 1.3% higher Thursday, after dropping
12% Wednesday following the indictment. Claxton is privately
owned.
Write to Jacob Bunge at jacob.bunge@wsj.com and Brent Kendall at
brent.kendall@wsj.com
(END) Dow Jones Newswires
June 04, 2020 20:00 ET (00:00 GMT)
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