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New lawsuits accuse many meat sellers of price-fixing
 


CHICAGO, Ill. — A new round of lawsuits have been leveled against chicken companies by the nation’s largest supermarket and restaurant chains alleging an eight-year price-fixing conspiracy.

Separately, lawsuits have hit some of the nation’s top selling hot dog, sausage and Spam producers in a federal class action accusing several leading pork producers of price-fixing in the $20 billion market.

The first price manipulation allegations were filed in January, charging that a “cartel” of U.S. chicken producers illegally raising the price of broiler chickens that dates back to 2008. Consequently, suppliers and retailers argued in their lawsuits that they paid too much for chicken, a burden the plaintiffs’ claim has been felt by consumers as well.

The latest cases have been consolidated with the earlier lawsuits and are currently in pretrial discovery in the U.S. District Court for the Northern District of Illinois in Chicago.

On June 29, Kroger Co., the nation’s largest supermarket chain, filed suit in U.S. District Court along with Albertsons Cos. and Hy-Vee, Inc. against Tyson Foods, Koch Foods, Inc., Perdue Foods LLC, Pilgrim’s Pride and 14 other companies, alleging chicken producers conspired to fix broiler chicken prices by limiting supplies and inflating prices from at least Jan. 1, 2008-Dec. 31, 2016.

A few days later, Supervalu, Inc., and other supermarket and restaurant chains including Publix Super Markets, Inc., Wakfern Food Corp., Associated Grocers of the South, Inc. and Meijer, Inc., along with OSI Restaurant Partners LLC – which includes its flagship Outback Steakhouse chain – filed similar lawsuits alleging a price-fixing conspiracy.

Tyson spokesman Worth Sparkman said in an email to Farm World: “We are disappointed by the recent case filed by our customers. Lawsuits like these do not benefit consumers, but only work to enrich opportunistic plaintiff attorneys.

“Add-on complaints like this do not change our position. The lawsuits are unfounded and we are determined to defend against these baseless claims.”

Pilgrim’s Pride and others did not respond to similar requests for comment.

The $30 billion broiler chicken market dominates virtually all chicken consumed across the country, from the chicken farm to the dinner plate. The USDA’s latest statistics show about 9 billion boilers are sold in the U.S. annually.

Pork producers, Smithfield Foods, Hormel Foods and Tyson and six other companies were named in a 98-page class action lawsuit on June 29 in U.S. District Court in Minneapolis claiming that since 2009, the companies colluded to fix the price of pork by exchanging confidential information via an outside market monitor called Agri Stats.

Because of those actions, the lawsuit claims, pork consumers were forced to pay artificially high prices. The class action lawsuits were filed against the defendants by foodservice distributors Maplevale Farms of New York, John Gross & Co. of Mechanicsburg, Pa., and 12 consumers.

Besides the three larger pork producers, other defendants include Agri Stats, Inc., of Fort Wayne, Ind. – a subsidiary of Eli Lilly & Co. – Clemens Food Group LLC, Indiana Packers Corp., Seaboard Foods LLC, Triumph Foods LLC and JBS USA, owner of Pilgrim’s Pride.

According to the lawsuit, Smithfield, with $9 billion in annual pork sales, is owned by WH Group, LTD, the largest pork company in the world and JBS USA controls 80 percent of the wholesale pork market. Among the national pork brands affected by the alleged price fixing scheme are Nathan’s Famous, Sara Lee, Spam, Ball Park Franks, Hillshire Farm and Jimmy Dean.

The plaintiffs are seeking damages in excess of $5 million and refunds to consumers who they say were overcharged for pork products such as lunchmeat, sausages, ham and bacon.

In response to comment requested by Farm World, Hormel Foods, the corporate parent of Spam, said in an email: “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. We are confident that any allegations such as these are completely without merit. We intend to vigorously defend this lawsuit.”

In another email comment, Smithfield Senior Vice President of Corporate Affairs Keira Lombardo said: “Smithfield Food is a long-established company with a family of well-loved brands that millions of consumers enjoy. Our products are priced fairly and competitively, and we will vigorously defend the erroneous allegations in this lawsuit suggesting otherwise.”

Tyson did not respond, other than its comments about the chicken case. Agri Stats, also named in the both cases, did not respond.

Representing the dozen pork consumers, Steve Berman – managing partner of law firm Hagens Berman of Seattle — said in a press release: “Hard-working families across the nation strive to put food on the table, but little do they know, the game is rigged from the beginning; the largest food companies are secretly ensuring their dollar doesn’t go as far at the supermarket as it should.

“We’re seeking to hold Tyson, Hormel and others accountable for this nearly decade-long scheme to hog their share of profits.”

7/18/2018