The US Department of Justice has accused data provider Agri Stats of “anti-competitive” practices that in some cases led to higher meat prices.
A civil anti-trust lawsuit has been brought against Fort Wayne, Indiana-based Agri Stats in the district court of Minnesota by the DoJ in what the government justice body said was for “organising and managing anti-competitive information exchanges among broiler chicken, pork and turkey processors”.
Agri Stats said it “plans to vigorously defend” the lawsuit. The company, set up in 1985, lays out its objectives on its website: “We tirelessly strive to uphold the values of providing accurate, timely, and confidential data for our customers to make informed decisions to improve their bottom-line profitability.”
However, in a statement yesterday (28 September), the DoJ suggested 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”.
Agri Stats compiles weekly and monthly reports for meat processors, which, the DoJ said, they use to “set prices and output levels”. They also contain information on sales prices and worker and farmer compensation, it claimed.
The DoJ added the lawsuit also “alleges that Agri Stats understood that meat processors have used these reports for anti-competitive purposes and, in some instances, even encouraged meat processors to raise prices and reduce supply”.
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By GlobalData
US meat processors and overseas companies operating in the country have previously faced accusations of fixing prices, and in some cases have been ordered to pay penalties.
Tyson Foods, Hormel Foods, Cargill, Foster Farms and Perdue Farms are among those that have faced charges in the past over conspiring to fix poultry prices. And the US unit of Brazil meat giant JBS has also similarly been implicated in pork price fixing. All involved data provided by Agri Stats.
Yesterday, the DoJ said in its latest lawsuit against the data provider that “participating processors accounted for more than 90% of broiler chicken sales, 80% of pork sales and 90% of turkey sales in the United States”.
It added: “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.”
Jonathan Kanter, the assistant attorney general of the DoJ’s Antitrust Division, said it was the department’s role to protect consumers from such alleged practices.
“The Justice Department is committed to addressing anti-competitive information exchanges that result in consumers paying more for chicken, pork and turkey. This case is the latest effort by the Justice Department to protect American consumers, farmers and workers from anti-competitive practices in the agriculture industry.”
Agri Stats defended its corner. “The lawsuit threatens serious harm to American consumers of chicken, pork, and turkey because protein producers depend upon Agri Stats’ reports to help them identify opportunities to reduce production costs to keep prices low.
“Agri Stats has played a vital role in the United States economy, helping to drive increased efficiency, improved innovation, and ultimately provide more chicken, pork, and turkey to consumers for less money.”
The data provider highlighted how US protein production has “expanded dramatically” since Agri Stats’ inception, while prices have “plummeted”.
It added: “DoJ’s lawsuit turns the antitrust laws on their head and seeks to punish Agri Stats for fostering these consumer benefits.”
Nevertheless, the Biden administration has been taking measures to increase competition in the US meat sector as prices rose during the latest inflation cycle and prevent production from being concentrated by a handful of companies.
In 2021, the White House pledged to take “strong actions to crack down on illegal price fixing, enforce antitrust laws, and bring more transparency to the meat-processing industry”.
Meanwhile, Agri Stats sought to draw attention to the fact it was previously investigated by the DoJ but that there was no “evidence of wrongdoing”.
It added: “DoJ investigated the company for two years over a decade ago, and ultimately closed the investigation in 2012 without taking any action or recommending that Agri Stats make any changes to its business.
“Agri Stats appreciates the continued support and trust of our customers and business partners, and looks forward to the day when it can put baseless antitrust allegations in the rearview mirror and focus solely on the hard work of helping protein industries in the United States.”
