As part of a string of lawsuits directed against major players in the pork industry, Compass Group USA, Inc. filed a complaint in the Western District of North Carolina against Agri Stats, Inc., as well as major pork processors, alleging a decade-long conspiracy to artificially raise the price of pork by restricting supplies. Some of the related cases have been partially settled.
The companies mentioned in the complaint included Clemens Food Group, LLC, Hormel Foods Corporation, JBS USA Food Company, Seaboard Corporation, Smithfield Foods, Inc.,Triumph Foods, LLC, Tyson Foods, Inc. and affiliated companies.
From 2008 to 2018 or later, Agri Stats provided “benchmarking reports” that gave “detailed financial and production data from each of the Producer Defendants,” the complaint said. These reports were significantly more detailed than normal reports given in healthy, competitive markets, per the plaintiff, and they were allegedly used by the defendants to “monitor each other’s production, and therefore control supply and price in furtherance of their anticompetitive scheme.”
This was possible, the complaint said, as the defendants are vertically integrated companies that “directly control the production and supply of pork through their wholly owned and operated farms where the hogs are raised, fed, and prepared for slaughter,” with the defendants accounting for over 80% of the domestic pork industry market.
Due to the sprawling impact of this conspiracy, Compass Group suffered from having to pay “supra-competitive prices” for pork. Also, the defendants “fraudulently concealed” their operations by holding “private meetings,” using phone calls so there were no written records, and using Agri Stats’ services and other means to conceal their sensitive information so it could not be leaked to the public.
The plaintiff is seeking a declaration that the defendants violated Section 1 of the Sherman Act, damages and treble damages, pre- and post-judgment interest, attorney’s fees and costs, and other relief.
Compass Group is represented by Nexsen Pruet LLC.