A proposed class-action lawsuit filed in Minnesota Thursday alleges the nation’s largest pork companies broke antitrust laws by colluding to artificially inflate consumer pork prices.
The lawsuit, submitted in the U.S. District Court of Minnesota, is brought against Austin-based Hormel Foods Corp. and eight other companies, including Tyson Foods, JBS USA and Smithfield Foods.
The scheme, according to the complaint, began in 2009 when Indiana-based Agri Stats, a provider of data services to agricultural industries, approached the pork companies about creating a benchmarking report that would include financial information, slaughter rates and supply levels.
Benchmark reports are a legal industry tool for gauging a company’s performance, but plaintiffs believe Agri Stats took it a step too far. The goal, the complaint alleges, was for the companies “to use this detailed sensitive information for the purposes of monitoring each other’s production and pricing ... so as to maintain a reduction of production and an increase of price.”
The maker of a number of Hormel-branded packaged meat products says the allegations are erroneous.
“Hormel Foods is a 127-year-old global branded food company with a reputation as one of the most respected companies in the food industry,” the company said in a statement. “We are confident that any allegations such as these are completely without merit. We intend to vigorously defend this lawsuit.”
Agri Stats, a co-defendant in the case, is facing similar litigation for its data-sharing practices within the broiler chicken industry. Hagens Berman Sobol Shapiro, a Seattle-based law firm, brought the pork and poultry cases and is seeking class-action status for both. Minneapolis-based Gustafson Gluek is acting as local counsel on the pork lawsuit.
The four largest companies, Smithfield, Tyson, JBS and Hormel, claim roughly 70 percent of the market. Consolidation within the meatpacking industry lends itself to noncompetitive behavior, the lawsuit suggests.
The complaint, which lists as plaintiffs a dozen consumers from Minnesota and several other states, alleges defendants broke antitrust laws, unfair competition laws, consumer protection laws and unjust enrichment common laws within 11 states. The Hagens Berman law firm said it hopes the lawsuit eventually includes all 50 states.
Faegre Baker Daniels is representing Hormel.