Justice Department Sues Agri Stats for Operating Extensive Information Exchanges Among Meat Processors

 

Agri Stats Suppresses Competition by Organizing and Managing Scheme to Share Competitively Sensitive Information Among Protein Processors

The Justice Department filed a civil antitrust lawsuit against Agri Stats Inc. today for organizing and managing anticompetitive information exchanges among broiler chicken, pork and turkey processors. The complaint alleges that Agri Stats violated Section 1 of the Sherman Act by collecting, integrating and distributing competitively sensitive information related to price, cost and output among competing meat processors. This conduct harms customers, including grocery stores and American families.

The complaint, filed in the District of Minnesota, alleges that Agri Stats has for years produced comprehensive weekly and monthly reports for participating meat processors, which use the data to set prices and output levels. Spanning hundreds of pages, the reports contain recent data relating to sales prices, costs such as worker and farmer compensation and output that are often detailed by facility or company. Participating processors accounted for more than 90% of broiler chicken sales, 80% of pork sales and 90% of turkey sales in the United States. The complaint further alleges that Agri Stats understood that meat processors have used these reports for anticompetitive purposes and, in some instances, even encouraged meat processors to raise prices and reduce supply. While distributing troves of competitively sensitive information among participating processors, Agri Stats withholds its reports from meat purchasers, workers and American consumers, resulting in an information asymmetry that further exacerbates the competitive harm of Agri Stats’ information exchanges.

“The Justice Department is committed to addressing anticompetitive information exchanges that result in consumers paying more for chicken, pork and turkey,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “This case is the latest effort by the Justice Department to protect American consumers, farmers and workers from anticompetitive practices in the agriculture industry.”

The complaint alleges that Agri Stats’ scheme continues to this day in the chicken processing industry, among others. While Agri Stats paused its turkey and pork reporting after facing several private antitrust lawsuits, Agri Stats has expressed an intent to resume such reporting after these lawsuits’ resolution.

This lawsuit marks the latest action by the Antitrust Division to combat unlawful information exchanges. It follows a recent enforcement action (here and here) against four poultry processors as well as two facilitators for participating in a long-running conspiracy to suppress workers’ compensation in the poultry industry. In that case, the district court entered consent decrees enjoining the processors from exchanging competitively sensitive information and barring the facilitators from providing surveys or other services that enable direct competitors in any industry to share competitively sensitive information.

Anyone with information about collusion in agriculture industries, competitors sharing non-public price or compensation information or any other violations of the antitrust laws is encouraged to contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or antitrust.complaints@usdoj.gov. Information about anticompetitive practices in livestock and poultry markets can also be submitted to the USDA and Justice Department’s Agricultural Markets Enforcement Partnership at www.farmerfairness.gov.