Law Street Media

Kroger and Food Companies File Antitrust Lawsuit Against Pork Producers for Conspiracy to Inflate Prices

A Tyson Foods manufacturing plant.

Wilkesboro, NC, USA-19 Oct 2019: Tyson Foods, Inc., a poultry and poultry products plant.

On Tuesday, numerous supermarket companies and a food distributor filed a complaint in the Northern District of California against various pork producers for a purported conspiracy to control the pork industry and raise prices for profit.

The plaintiffs include: The Kroger Co., Albertsons Companies Inc., Hy-Vee Inc., Save Mart Supermarkets, and US Foods, Inc. Meanwhile, the defendants are: Agri Stats, Inc., Clemens Food Group, LLC, The Clemens Family Corporation, Hormel Foods Corporation, Hormel Foods, LLC, JBS USA Food Company, Seaboard Foods LLC, Seaboard Corporation, Smithfield Foods, Inc., Triumph Foods, LLC, Tyson Foods, Inc., Tyson Prepared Foods, Inc., and Tyson Fresh Meats, Inc.

In the complaint, the plaintiffs alleged that the defendants and Indiana Packers Corporation entered “into a conspiracy from at least 2009 to the present to fix, raise, maintain, and stabilize the price of pork,” in part by controlling the supply to increase prices. Upon further investigation, the plaintiffs found that “Agri Stats was key to the formation, operation, and continuing stability of the conspiracy alleged,” which allowed “the conspiracy [to] be effective in increasing, maintaining, stabilizing and/or fixing the price of pork sold to Plaintiffs.”

The plaintiffs alleged that several of the defendants are vertically integrated companies, “to control directly the production and supply of pork through their wholly-owned and operated farms, where hogs were raised, fed, and prepared for slaughter.” Therefore, according to the plaintiffs, the defendants were able to control the amount of hogs and sows they owned in a coordinated effort to minimize production and raise prices by reducing the number of hog farms by 70%. 

The plaintiffs are suing on the counts of a violation of Section 1 of the Sherman Act due to this conspiracy having a “direct, substantial, and foreseeable effect on interstate commerce by raising and fixing prices for pork” and a violation of the Packers and Stockyard Act (PSA) for engaging in “unfair, unjustly discriminatory, or deceptive practice[s].”

Kroger and the other plaintiffs are seeking damages “to the maximum extent allowed under law,” attorney’s fees and costs, and other relief.

The plaintiffs are represented by Kenny Nachwalter P.A. 

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