Tyson Foods on Friday said that the Securities and Exchange Commission has completed its investigation into allegations of price fixing and won't be taking further action against the company.
A letter from the SEC stated that it has concluded its investigation and that, "based on the information it has ... it does not intend to recommend an enforcement action by the SEC against Tyson," the company said.
The nation's largest meat company said it received the SEC letter Tuesday concerning its investigation of Tyson-related allegations of broiler-chicken price fixing.
Poultry buyers sued Tyson and its competitors last year, claiming that the companies have colluded, since 2008, to reduce broiler-chicken output to manipulate prices.
According to accusations in court documents filed Dec. 2016, a handful of meat producers conspired to fix, raise, maintain and stabilize chicken prices by "coordinating their output and limiting production with the intent and expected result of increasing prices of broilers in the United States."
The plaintiffs' claim that Tyson and its competitors manipulated and artificially inflated a broiler price index called the Georgia Dock.
In July 2016, the U.S. Department of Agriculture requested a Georgia Dock investigation, and the Georgia Department of Agriculture, which publishes the index, declined to do so. After that, the USDA began publishing its own price statistic, which confirmed the Georgia Dock prices were inflated, according to court documents.
The Georgia Dock was taken offline in December.
As a result of those findings, the plaintiffs argued that broiler prices between 2008 and 2016 exceeded the amount they would have paid if prices were determined by a competitive market.
The SEC opened an investigation into Tyson Foods on Jan. 20, days after Tom Hayes replaced Donnie Smith as chief executive officer.
During the company's first-quarter earnings call, Hayes said the Georgia Dock for Tyson is a "tempest in a teapot."
Tyson confirmed the SEC investigation in February and said it fully cooperated with the commission. Tyson denied any involvement in the allegations. Competitors Pilgrim's Pride Corp. and Sanderson Farms Inc. also denied price-fixing allegations.
Since the investigation began, questions loomed about Tyson Foods and other chicken producers, affecting market activity and shareholder investments across the board, analysts said.
"It's nice to hear the home team has been exonerated," said Bob Williams, senior vice president and managing director of Simmons First Investment Group.
Tyson shares closed at $63.25 on Friday, down 61 cents.
Business on 08/26/2017