Pilgrim's Pride ordered to pay $26M for manipulating prices
A US court has found that Pilgrim's Pride knowingly tried to manipulate the price of chicken and ordered the company to pay $26 million in damages to dozens of contract poultry growers in Arkansas.
Federal judge Charles Everingham ruled Friday that internal emails show Pilgrim's closed plants and cancelled its contracts with farmers with the express intention of cutting the supply of chicken and pushing retail prices higher, violating the 1921 Packers and Stockyards act, which prohibits livestock companies from unfair and deceptive practices. The court ruled Pilgrim's was not guilty of other claims, including fraud and false representation.
In 2008, Pilgrim's Pride filed for bankruptcy protection as it faced rising feed costs and a downturn in the poultry market. The company emerged from bankruptcy when Brazil-based meat company JBS took a majority stake in the company.
In the ruling, Everingham wrote the growers were adversely affected by the decision by Pilgrim's not to purchase from them and idle the Arkansas plant instead of selling it. He wrote there was some difficulty arriving at actual damages, in part because of some growers' "failure to keep and produce records" relating to their business and income.
Pilgrim's Pride has stated that it plans to appeal the ruling. "We're disappointed in the court's findings, and we don't find them consistent with the Packers and Stockyards Act," Pilgrim's CEO Bill Lovette said in a statement sent to The Associated Press. "We completely reject the idea that we tried to manipulate the market. We tried to live in the market, not manipulate it."
The ruling has prompted shares of Pilgrim's Pride to fall 35 cents, or 8.2%.
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