Clucking hell! Won’t you look at this:
Pilgrim’s Pride Corporation (NASDAQ: PPC) today announced that it has entered into a plea agreement with the United States Department of Justice Antitrust Division in respect to its investigation into the sales of broiler chicken products in the United States.
In the plea agreement, which is subject to the approval of the United States District Court of Colorado, Pilgrim’s and the Antitrust Division agreed to a fine of $110,524,140 for restraint of competition that affected three contracts for the sale of chicken products to one customer in the United States. The agreement does not recommend a monitor, any restitution or probationary period, and provides that the Antitrust Division will bring no further charges against Pilgrim’s in this matter, provided the company complies with the terms and provisions of the agreement. Pilgrim’s expects to record the fine as a miscellaneous expense in its financial statements in the third quarter of 2020.
“Pilgrim’s is committed to fair and honest competition in compliance with U.S. antitrust laws,” said Fabio Sandri, Pilgrim’s CEO. “We are encouraged that today’s agreement concludes the Antitrust Division’s investigation into Pilgrim’s, providing certainty regarding this matter to our team members, suppliers, customers and shareholders.”
You might remember we took a look at the rapidly developing chicken price-fixing scandal in the US last week, and how a simple chart of three big players’ operating margins during the alleged 7-year period told a tale in and of itself.
Well it seems the chickens are not coming home to roost for $4bn Pilgrim’s Pride. Shareholders won’t be losing any feathers over the chicken feed fine: $110.5m is a quarter of this year’s estimated operating profits, and a poultry 2 per cent of the company’s cumulative ebit over the time the alleged chicken collusion was taking place.
In corporate America, you could say it pays to fall fowl of the law after the fact.
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