Tyson Foods Inc. of Springdale said Friday that the Securities and Exchange Commission has concluded its investigation into price-fixing allegations and doesn’t intend to recommend an enforcement action.
The publicly traded meat processor (NYSE: TSN) said it received a letter from the SEC on Tuesday.
“The letter stated that the SEC staff has concluded its investigation and that, based on the information it has as of that date, it does not intend to recommend an enforcement action by the SEC against Tyson,” the company said in a news release.
Tyson Foods’ spokesman Gary Mickelson said the company had “no additional comment about the SEC review.”
In July, a U.S. District Court judge in Arkansas dismissed a shareholders lawsuit against Tyson Foods that sprang from allegations of a massive price-fixing conspiracy involving the company and other chicken companies.
The shareholders alleged that they lost money as a result of the allegations, but a judge said their lawsuit failed “to plausibly allege that Tyson entered into an agreement with its industry competitors to suppress the domestic supply of chickens in order to increase prices.”
The original price-fixing allegations surfaced in 2016, when a New York food service distributor, Maplevale Farms Inc., filed a proposed class-action complaint against Tyson Foods, Pilgrim’s Pride Corp., Koch Foods Inc. and other chicken producers. The companies are leading suppliers of broiler chickens, which account for nearly all the chicken meat sold in the country and generate more than $30 billion in annual wholesale revenue.
Maplevale’s lawsuit, which is pending in U.S. District Court in Illinois, alleged that the producers conspired to keep the price of broiler chickens artificially high. The alleged conspiracy dated back to at least January 2008, according to the 113-page complaint.
Maplevale said the defendants’ actions resulted in a nearly 50 percent increase in broiler wholesale prices since 2008, despite input costs — such as those of corn and soybeans — falling about 20 percent over the same period.
More class-action complaints followed in late 2016, and at least one analyst downgraded Tyson stock, saying legal “damages could be very substantial.” Then, on Nov. 21, Donnie Smith, who had been Tyson’s CEO since November 2009, announced that he would resign on the last day of 2016. Smith denied he was stepping down because of the antitrust litigation.
All along, Tyson denied the allegations of price-fixing, calling the charges “false” and saying it would defend itself in court. During an event in New York in December, Tom Hayes, freshly appointed as the firm’s incoming CEO, said the company viewed the allegations “as an attack on our integrity as a company.”