U.S. Opens Antitrust Probe on Chicken-Industry Labor Practices

(Bloomberg) -- The U.S. Justice Department is investigating employment practices of Pilgrim's Pride Corp. and other chicken producers to determine whether the companies violated antitrust laws.

Pilgrim's, the second-biggest U.S. poultry company, disclosed the civil investigation in a securities filing. Perdue Farms Inc. said it received a letter from the Justice Department, a company spokeswoman said. Perdue is the fourth-biggest U.S. chicken producer. Dow Jones reported the investigation earlier.

Pilgrim's Pride shares fell more than 5% for the biggest decline in two weeks.

The investigation comes as the highly concentrated meat sector has been under scrutiny from the Biden administration and others for the high prices consumers pay for chicken and beef and the relatively lower prices paid to farmers raising animals. Slaughterhouse employees have recently been winning higher wages amid a worker shortage, with the labor squeeze limiting meat output and boosting prices.

The Justice Department decline to comment. Tyson Foods Inc., the top U.S. poultry producer, didn't reply to a request for comment.

The Justice Department's antitrust division has stepped up scrutiny of companies over practices that hurt competition in labor markets, limit employment options for workers and holding down wages. While the investigation of the chicken companies is civil, it has opened a criminal investigation into hiring practices by Raytheon Technologies Corp. In July, DaVita Inc., an operator of kidney dialysis centers, and its former chief executive officer were charged with colluding with other companies not to recruit one another's employees.