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Pilgrims, Tyson Slip on Report DoJ Seeks Employment Practices Details -Breaking


© Reuters.

By Dhirendra Tripathi – Stocks of Pilgrims Pride (NASDAQ:) and Tyson Foods (NYSE:) traded lower Friday after a report in The Wall Street Journal said the Justice Department is investigating whether poultry companies engaged in anticompetitive sharing about employment practices that capped plant workers’ wages.

Pilgrims pride fell 5% and Tyson Foods fell 2%, making it the biggest U.S. meatpacker. Sanderson Farms (NASDAQ): The stock was at 1.4% lower.

In an effort to uncover evidence of price fixing in the sector, the Justice Department has been monitoring industry practices. Representatives from farmers accused meat corporations of manipulating their market power to maintain artificially low livestock prices.

Meat plant workers claim that their employers colluded with them to trade compensation data in order to lower employee wages.

According to WSJ the plaintiffs in a Maryland federal case allege that industry officials used data swaps and annual events in order to compare employee benefits.

For more than one year, the meat industry has struggled with rising costs. This is why they use it to justify higher prices and increased shortages.

Major distributors and supermarket chains have filed civil suits against the producers of meat, alleging that they are charging them anticompetitive prices.  

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