New Antitrust Lawsuit Filed Against Major Pork Industry Companies

A new antitrust complaint was filed against companies involved in the pork industry on Friday, alleging that they participated in anticompetitive activity and raised prices for the plaintiffs, a group of meat distributors and grocery companies. The matter was filed in the Northern District of Illinois.

There is currently a consolidated class-action matter regarding pork antitrust activity being held in the Minnesota District Court. Some of the classes in that matter have begun settling claims with individual defendants. Each of the defendants in the lawsuit filed last week are also defendants in the Minnesota lawsuit, however, the present lawsuit was not filed as a class-action matter.

The 16 plaintiffs include Associated Food Stores Inc., Action Meat Distributors, and Brookshire Grocery Company.  The defendants include Agri Stats Inc., Clemens Family Corporation, Hormel Foods Corporation, JBS USA Food Company, Seaboard Corporation, Smithfield Foods Inc., Triumph Foods LLC, and Tyson Foods Inc., and other entities of the same companies. The plaintiffs explained that the defendants lead the $20 billion a year pork industry and control 80% of the market.

Through the lawsuit, the plaintiffs are seeking to receive treble damages for the alleged harm done to them through the defendants breaches of United States antitrust laws. The purported “conspiracy period” began in 2009 and is ongoing, according to the complaint which says the defendants conspired to “fix, raise, maintain, and stabilize the price of pork” through sharing benchmarking reports on Agri Stats.

According to the complaint, by sharing production reports between the pork producers either monthly or more frequently, the defendants were able to control the supply and price of pork. The information was shared on Agri Stats which is only available by subscription and not publicly.

“Because of the nature of the life of a hog, even current and historical information about hog production numbers effectively gives forward-looking supply information to competitors,” the complaint explained. It cited that a typical production cycle is four years, and increasing production factors in time for breeding, selecting, and rearing pigs. Because of this, the information spread between the producers through Agri Stats was sufficient information to artificially increase prices.

The grochers and distributors alleged that because of the conspiracy, they paid a higher price for pork than they would have paid in a competitive market. They asked for damages, interest, and the costs of the lawsuit.

The plaintiffs, represented by L&G Law Group LLP, Kaplan Fox & Kilsheimer LLP, and The Coffman Law Firm, alleged that the defendants violated Section 1 of the Sherman Act.