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Agri Stats and Pork Producers Price-Fixing Antitrust Class Action

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Crowd of Pigs

The complaint for this antitrust class action alleges that producers of pork conspired to raise prices on their products since at least 2009, with the help of an industry data-sharing serving called Agri Stats, Inc. Pork products include pig meat (fresh or frozen), smoked ham, sausage, and bacon.

The Nationwide Injunctive Relief Class for this action is all persons and entities who indirectly bought pork from the defendants or co-conspirators for personal use in the US during the class period. Additional class have been proposed for Arizona, California, the District of Columbia, Florida, Hawaii, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, West Virginia, and Wisconsin.

The pork industry is worth $20 billion dollars annually. The complaint says that the pork-producer defendants in this case—Clemens Food Group, LLC, Hormel Foods Corporation, Indiana Packers Corporation, JBS USA Food Company, Seaboard Foods LLC, Smithfield

Foods, Inc., Triumph Foods, LLC, and Tyson Foods, Inc.—control over 80 percent of the wholesale market. Barriers to entry are high. The complaint points out that these facts make it easy to manipulate in antitrust conspiracies.

But the pork-producer defendants were aided by an additional defendant, a data-sharing service known as Agri Stats, which enabled the communication of sensitive information which allowed the pork producers to coordinate their output and limit production.

How did Agri Stats facilitate the pork conspiracy? The complaint claims that Agri Stats made available competitively sensitive, non-public information about prices, capacity, sales volume, demand, and so on in “benchmarking” reports. (Agri Stats has previously been sued in an antirust case about the broiler chicken market.)

These reports, the complaint says, were not like other industry reports. First, the complaint says, the data was current and forward-looking. The complaint quotes the courts as saying that these types of reports hold “the greatest potential for generating anticompetitive effect.”

Second, the information was specific, with producers able to decipher which data belonged to which producer. The complaint quotes the courts as preferring “that information be aggregated in the form of industry averages, thus avoiding transactional specificity.”

Third, the information was not publicly available. The pork producers had to purchase subscriptions to the reports, and the complaint claims that they paid “millions of dollars” for the information, far more than they would have paid for ordinary pricing and production reports. Buyers did not have access to the information.

The complaint thus claims, “The data exchanged through Agri Stats bears all the hallmarks of the enforcement mechanism of a price-fixing scheme.” Through these reports, it says, the pork producers monitored each other’s outputs and pricing and were able to keep their conspiracy going.

Also, the complaint claims that the pork producers had discussed production cuts at least once and “publicly signaled to each other that no supply increases would happen.”

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