Last Friday, Kraft Heinz filed a complaint and became the latest addition to many companies who have filed antitrust claims against pork industry producers like Smithfield and Tyson. The newest lawsuit by Kraft Heinz, which was filed in the Northern District of California, alleged that the defendants engaged in anticompetitive and unlawful conduct when they manipulated and induced a price-fixing scheme on the pork industry.
Collectively, the defendants in the suit control over 80% of the wholesale pork market in the United States, the filing said. The plaintiff alleged that the defendants entered into the aforementioned conspiracy as early as 2009. By restricting pork output while simultaneously limiting pork production, the defendants were reportedly able to control pork pricing as early as 2009.
In order to control the pricing, the pork companies needed sensitive market information, which was provided to them by Agri Stats, another defendant. The defendants were able to exchange “detailed, competitively sensitive, and closely guarded non-public information about prices, capacity, sales volume and demand through their co-conspirator, Defendant Agri Stats,” he complaint said. The price-fixing scheme was made possible by Agri Stats making otherwise sensitive information available exclusively to co-conspirators and not any buyers in the market. The information was used by the defendants to fix, raise, stabilize, and maintain the prices they desired.
As a result of the price-fixing scheme, Kraft Heinz is claiming that they suffered substantial injury. Beginning in 2009, the plaintiff paid the inflated pork prices that were controlled by the defendants. Since the prices would have been inherently different in a competitive market, the plaintiff was harmed by the defendant’s anticompetitive behavior when they were forced to pay the artificially inflated prices.
This lawsuit by Kraft Heinz against the pork industry giants comes among a host of other lawsuits against the companies, all of which have accused them of engaging in anticompetitive conduct through the use of a price-fixing scheme.
The plaintiff is ultimately citing both antitrust injury and violations of the Sherman Act. They are seeking damages, an order enjoining the defendants from engaging in all anticompetitive behavior, pre and post-judgement interest, litigation fees, a jury trial, and any other relief deemed proper by the Court.
Kraft Heinz is represented by Burke, Williams & Sorensen.
