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Pork industry facing anti-trust lawsuit

By Erin Smith

With lawsuits being filed against local hog farmers, the pork industry is facing yet another challenge with a federal anti-trust lawsuit which was filed in June in the U.S. District Court for the District of Minnesota. The class-action lawsuit names Argi-Stats Inc., Clemens Food Group LLC, Hormel Foods Corporation, Indiana Packers Corporation, JBS USA, Seaboard Foods LLC, Smithfield Foods Inc., Triumph Foods LLC, Tyson Foods Inc. as defendants.

These companies manufacture such familiar brands as Tyson Foods, Hormel, Smithfield, SPAM, Steak-eze, Jimmy Dean, Nathan’s Famous, Sara Lee, Ball Park Franks, Hillshire Farm, Bosco’s, Jennie-O, and others.

The lawsuit was filed by the Hagens Berman Sobol Shapiro law firm and alleges a price-fixing scheme resulted in inflated prices for pork products. The lawsuit includes as plaintiffs “all persons and entities who purchased pork indirectly from a defendant or co-conspirator for personal use in the United States from at least January 1, 2009 until the present (Class Period).” You can read the lawsuit in its entirety here.

The lawsuit alleges that major industry leaders in the pork industry conspired to force consumers to pay inflated prices for bacon, ham and other pork products. The lawsuit claims the  companies worked together for a decade regarding the pork prices through such efforts as limiting production and expecting higher prices for pork.

According to the lawsuit, abnormal prices were noticed in the pork market in 2009. The lawsuit says Agri-Stats, a company which provides reports on the pork market, included more detailed information than the other industry reports. The lawsuit alleges that the Agri-Stats reports included such information as production data and financial data for the industry leaders. The lawsuit alleges that the Agri-Stats reports forced companies that would normally be competitors in the pork market to become allies.

The lawsuit states, “Defendants and their co-conspirators collectively control over 80 percent of the wholesale pork market.”

The lawsuits alleges that information provided in Agri-Stats reports contains all of the elements of “the enforcement mechanism of a price-fixing scheme.”

The lawsuit also alleges the scheme originated from a similar action by Agri-Stats involving the broiler chicken industry. In that action, the resulting prices in the broiler chicken market were alleged to have been inflated, as well.

Plaintiffs named in the lawsuit reside in various locations throughout the United States including New York, New Hampshire, Wisconsin, Montana, Florida, New Mexico, California, Massachusetts, Minnesota, South Carolina and South Dakota.

The plaintiffs have requested a jury trial.

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