More antitrust lawsuits hit the meat industry. This time, it’s pork.

 

By Leah Douglas, The Fern

November 7, 2019

 

The antitrust wars have come for chicken, beef — and now pork.

 

A class-action lawsuit filed this week on behalf of pork consumers alleges that hog companies have colluded to artificially hike the price of pork and, as a result, their profits. The complaint also provides new insight into Agri Stats, a data-sharing company that sits at the center of the wave of antitrust allegations sweeping the meat sector.

 

The complaint, along with a similar suit brought on behalf of commercial pork buyers, was filed in Minnesota District Court on Nov. 6. The pork companies named in the case include meatpacking giants Smithfield Foods, Tyson Foods, and JBS USA, as well as Hormel Foods and several other pork companies. Together, the defendants control more than 80 percent of the hog market, according to the complaint.

 

The suit alleges that beginning in 2009, the companies colluded to reduce the supply of pork and thereby drive up their profits. Using reports produced by Agri Stats, which is also a defendant in the case, the companies were allegedly able to “have access to standardized data (cost, price, and supply information) from their erstwhile competitors which they used to extract the maximum amount of profits from the American consumer.”

 

A representative from Hormel said that the lawsuit “is without merit, and we are confident we will prevail in court once again.” Tyson, JBS, and Smithfield did not respond to requests for comment.

 

These allegations of antitrust violations in the pork industry join a wave of concern that over the past decade, the biggest corporate actors in the beef and poultry industries have coordinated their production and suppressed producer pay to hike their profits.

 

Because of decades of consolidation in the meat sector, many of the defendants in these cases are the same. For instance, Tyson Foods is a defendant in the pork, beef, and poultry litigations. JBS is a defendant in both the pork and beef litigations, and its subsidiary Pilgrim’s Pride is a defendant in the poultry litigation.

 

Agri Stats is also a defendant in many of the pork, beef, and poultry cases. The Indiana-based data company produces subscription-only reports for the meat industry that provide granular information on production levels, farmer pay, and other typically proprietary information.

 

In the poultry and beef industries, both producers and buyers have alleged that meat companies use Agri Stats reports to coordinate their pricing and farmer wages in the pursuit of higher profits.

 

While heavily redacted, this week’s complaint filed on behalf of pork consumers sheds more light on how Agri Stats reports are compiled, managed, and distributed.

 

According to the complaint, Agri Stats’ sales reports allowed the pork companies receiving those reports to compare their pricing information with that of competitors. In some cases, plaintiffs say the sales data being circulated was just a week or two old. Another Agri Stats report, more than 300 pages long, discussed cost information for each of the pork plants sharing its data with the company.

 

Additionally, Agri Stats employees allegedly performed site visits to help pork company workers “[understand] the intricacies and implications of the data” and to aid in the setup of data collection. The plaintiffs charge that with this hands-on approach, “Agri Stats ensured that the agreement between competitors was a two-way street.”

 

Agri Stats did not respond to a request to comment on the litigation.

 

In the past, Agri Stats has said that its reports cannot be used to collude because the plants whose production data is detailed in its reports are anonymous, identified only by a number. Yet this week’s complaint casts more doubt on whether that data is truly anonymous...

 

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https://thefern.org/ag_insider/more-antitrust-lawsuits-hit-the-meat-industry-this-time-its-pork/