Antitrust Suit Filed Against Pork Industry Producers

Amory Investments LLC has filed antitrust litigation against a host of pork industry giants, including companies like Tyson and Smithfield. The suit was filed Tuesday in the Northern District of New York and demands a trial by jury.

Anticompetitive conduct in the pork industry is plentiful and takes the form of vertically integrated operations, high barriers to entry which prevent competitors from entering the market, consolidation and concentration, inelastic supply and demand, and the homogeneity of pork products, the complaint explained. The defendants in this suit are the leading suppliers of pork in the United States. Collectively, the defendants control more than 80% of the wholesale pork market, according to the filing.

The complaint alleged that the pork integrator defendants conspired with defendant Agri Stats to “fix, raise, maintain, and stabilize the price of pork.” As an information sharing service that provides comprehensive data reports to the defendants, Agri Stats was a valuable part of the operation. The defendants coordinated and limited both output and production in an effort to increase United States pork prices.

Agri Stats provided comprehensive reports to the defendants that were customized and would not be normally provided in a lawful and competitive market. The plaintiff explains that “the data exchanged through Agri Stats is a classic enforcement and implementation mechanism of a price-fixing scheme.” Agri Stats also ensured that its “detailed, sensitive business information was available only to pork producers and not to the public or purchasers like Plaintiff.”

The purportedly unlawful conduct on behalf of the defendants resulted in an increase in pork prices and a subsequent increase in revenue and profit for the defendants. Amory explained that the prices “exceeded the amount [they] would have paid if the price for pork had been determined by a competitive market.” The conduct which caused this discrepancy allegedly injured the plaintiff.

Ultimately, Amory is claiming a violation of the Sherman Act against all defendants and a judgement that their actions constitute unlawful conduct under the Sherman Act. They are also seeking damages, that the defendants be enjoined from engaging in such behavior in the future, and costs.

Amory is represented by Boies Schiller & Flexner.