DOJ Files Antitrust Lawsuit Against Agri Stats Over Meat Industry Manipulation
The U.S. Department of Justice (DOJ) has taken legal action against data company Agri Stats, filing an antitrust lawsuit on Thursday. The lawsuit alleges that Agri Stats’ weekly reports on meat pricing and sales have facilitated anti-competitive practices within the chicken, pork, and turkey industries.
This move comes after meat companies such as Smithfield Foods and Tyson Foods have faced previous lawsuits from restaurants and other food buyers, accusing them of using Agri Stats’ reports to conspire and drive up meat prices. The DOJ’s complaint states that Agri Stats operates its information exchanges in a manner that prioritizes industry profits over fair competition.
In response to the allegations, Attorney Justin Bernick of law firm Hogan Lovells, representing Agri Stats in the DOJ case, has denied the claims. Bernick argues that Agri Stats provides essential benchmarking services that help maintain low production costs and prices for consumers.
The DOJ complaint reveals that meat processors pay substantial sums for Agri Stats reports, which include “loosely anonymized” cost, output, and price information. These reports allegedly enable companies to align their prices with competitors, potentially leading to price manipulation.
One specific example outlined in the complaint involves Tyson Foods. In January 2010, Tyson allegedly instructed its sales employees to utilize Agri Stats data during negotiations with retail buyers to secure higher prices. Tyson Foods has not responded to inquiries regarding their use of Agri Stats reports or provided comments on the lawsuit.
According to the DOJ, the companies relying on Agri Stats reports account for over 90% of broiler chicken, 80% of pork, and 90% of turkey sales in the United States. This dominance raises concerns about the potential impact on market competition and consumer pricing.