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Nestle Alleges Pork Industry Collusion Raised Prices

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Nestle, including Nestle Purina Petcare Company and Nestle USA Inc., filed a complaint on Thursday against a group of pork processing companies in the Northern District of Ohio. The companies alleged that collusion among the defendants led it to pay artificially inflated prices for the pork used in its pet food. 

The named defendants include Agri Stats, Clemens, Hormel, JBS, Seaboard, Smithfield, Triumph, and Tyson. Purportedly, Agri Stats provided the other defendants with detailed reports that enabled them to monitor competitors production levels and control the US pork supply. 

In the complaint, Nestle explained that the pork industry is a “highly-concentrated industry” and that the companies have ensured that there are barriers keeping other companies from entering the industry.  It noted that the companies are “vertically-integrated,” and that the defendants contract with growers and also control hog-raising. 

Nestle, in support of their claims, cited the U.S. Department of Justice investigation into chicken processing companies for alleged anticompetitive activity and associated legal charges. Some of the defendants in the present lawsuit are also involved in the investigation into the broiler chicken industry, and the plaintiff claimed that the other case supports the possibility that there is a similar conspiracy in the pork industry. 

Other companies have also alleged that there is antitrust activity among the same defendants and other pork producers.  There is currently a consolidated lawsuit in the District of Minnesota regarding similar allegations and similar defendants. Some of the parties in that matter have begun reaching settlements

The alleged activities began in 2009, and the plaintiffs claimed that the defendants control over 80 percent of the wholesale pork market. The complaint also listed the Indiana Packers Corporation, which reports data to Agri Stats, as a co-conspirator and noted that there are also various other people and corporations which should also be considered co-conspirators. 

Nestle asked the court for damages, and said that they should be tripled as per antitrust laws.  They further asked for interest and the costs of the lawsuit. Nestle is represented by Mellott Legal LLC.

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