The length to which the U.S. Department of Justice is going to hold chicken company executives accountable for fixing prices is further than the agency historically has gone in its dealings with the broiler industry, but it’s a far cry from meaningful.

That the former leaders of Pilgrim’s, a nearly $12 billion company, entered a plea deal in which the company paid a $110 million fine in mid-October might register as a significant matter for the public legal record. But more significant is that they received immunity from further legal proceedings — and dodged jail time.

After all, legal experts say, it’s really only prison sentences that have deterred such alleged criminal activity. The concern is that, in the absence of time behind bars, financial penalties alone simply become a cost of doing business.

Guilty or not, business will go on as usual for Pilgrim’s, as it likely will for all of the other giant chicken companies alleged to have colluded in a price-fixing cartel. The same can be said of beef and pork players also being sued for price-fixing.

More interesting to me is what this all says about the prosecutors — the DOJ — and the plaintiffs, particularly the consumers. How the DOJ came to settle for what amounts to relative chicken scratch doesn’t exactly engender confidence in a case that would — if it could — make a bigger public statement. And it’s ironic that consumers are suing the very companies whose economies of scale afford them the affordable meat and poultry that they’ve come to expect — and will continue to buy anyway.

How many consumers are picking up a package of Pilgrim’s product right now and thinking, “Wait a minute; weren’t they fined for price fixing?” when the price on that package perfectly suits their family’s budget and nutritional needs?

And, as the COVID-19 pandemic has highlighted further, price is what matters most.

In 2019, conventional product accounted for 81.5% of dollar sales, growing 65.2% over 2018; claims-based product stood at 18.5% of dollar sales, up 34.8% in that period. From March 15 to July 26 of this year, conventional product made up 82.4% of dollar sales, up 84.1% over the year-earlier period, and claims-based accounted for 17.6% of dollar sales, up just 15.9%.

Among other findings of the midyear Power of Meat 2020 report, moreover, are that 46% percent of consumers said they changed cuts to save money, and 32% say price-per-pound now has a bigger influence on what and how much they buy.

Consumers who pay more attention to the who, what, why, when, where and how an animal was raised are more inclined to also consider a company’s ethical values. But are there enough of them to care about potential corruption in companies large enough to make it a line item that it would affect change at the cash register, and thereby in the c-suite? I’d say, no.

A $110 million settlement will ultimately save Pilgrim’s money, as it will taxpayers who are funding the DOJ’s prosecution. The company will continue to process one of every five chickens in the United States, which — most powerful of all —will continue to save consumers money.

A game of chicken

Join for free* to continue reading.