Tyson Settles Anti-trust Case For $221.5 Million
A filing with the Securities and Exchange Commission reveals Tyson Foods has agreed to pay $221.5 million in a settlement in the broiler chicken antitrust civil price-fixing lawsuit against the company. The settlement will be reflected in the company’s first-quarter financial statement.
The agreement allows Tyson to exit the price-fixing lawsuits filed against it and other poultry companies filed by customers and consumers. The settlement comes after Pilgrim’s Pride Corp., Greeley, Colo., agreed to pay $75 million in a settlement on Jan. 11. JBS USA is the majority shareholder of Pilgrim’s Pride.
In both settlements the companies did not admit liability. The settlements with so-called "end-user" consumers and with more than 30 commercial purchasers were disclosed in filings on Tuesday in federal court in Chicago.
The civil price fixing case is not related to another cased where a grand jury in the US District Court of Denver indicted four executives at Pilgrim’s Pride and Claxton Poultry, Claxton, Ga., for their alleged role in a conspiracy to fix prices. Tyson Foods said previously that it is cooperating with the investigation.
After receiving a grand jury subpoena in April 2019, Tyson management said it uncovered troubling information about its operations related to the investigation and self-reported it to the Department of Justice. The company is hoping to escape punishment under the DOJ Antitrust Division’s leniency program.
Regarding this week’s filing with the SEC, Tyson said, "While the Company does not admit any liability as part of the settlements, it believes that the settlements were in the best interests of the Company and its shareholders in order to avoid the uncertainty, risk, expense and distraction of protracted litigation."
Tyson said the settlements are subject to the execution of long-form settlement agreements with the respective parties and court approval. They also do not settle claims made by plaintiffs who opted out of the classes in this particular case.
According to Tyson, the company employs 139,000 workers with annual revenues of about $43 billion. The company produces approximately 20% of America’s beef, pork and chicken.
The first of the broiler price-fixing lawsuits was filed in 2016. Other poultry processors named as defendants in the suit include Amick Farms, Case Farms, Claxton Poultry, Fieldale Farms, Foster Farms, George’s, Harrison Poultry, House of Raeford Farms, Koch Foods, Mar-Jac Poultry, Mountaire Farms, OK Foods, Peco Foods, Perdue Farms, Sanderson Farms, Simmons Foods and Wayne Farms.
Amick Farms, Fieldale Farms, George’s, Peco Foods and Pilgrim’s Pride have all reached settlement agreements with the plaintiffs.