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McDonald’s files pork price-fixing lawsuit

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Company alleges pork suppliers implemented a conspiracy to restrict output and limit production.

McDonald’s recently filed a lawsuit alleging numerous pork suppliers colluded to from around 2008 or early 2009 through the present to fix, raise, maintain, and stabilize the price of pork. The lawsuit alleges companies, including Smithfield Foods, Hormel Foods, JBS USA, Tyson Foods and JBS USA, implemented a “conspiracy” by all agreeing to restrict output and limit production “with the express intended purpose and expected result of increasing and stabilizing pork prices in the United States.”

According to the lawsuit, alleged co-conspirator Agri Stats, a statistical research and analysis firm, provide highly sensitive “benchmarking” reports that were unlike those of other lawful industry reports.

“Agri Stats gathers detailed financial and production data from each of the defendants, standardizes this information, and produces customized reports and graphs for the co-conspirators. The type of information available in these reports is not the type of information that competitors would provide each other in a normal, competitive market. Instead, the provision of this detailed information acts as the modern equivalent of the proverbial smoke-filled room,” the filing stated.

Further, the lawsuit said defendants went to great lengths to keep the existence of the conspiracy a secret, but “admitted in public calls that they had discussed production cuts at least once, and publicly signaled to each other that no supply increases would happen.”

Each defendant also engaged in acts in furtherance of the conspiracy by participating in such supply cuts and by limiting increases in supply that otherwise would have occurred.

As a result of the "unlawful conduct," McDonald's alleges it paid artificially inflated prices for pork during the relevant period. "Such prices exceeded the amount they would have paid if the price for pork had been determined by a competitive market, without defendants’ anticompetitive behavior. Thus, plaintiff suffered injury and damages due to defendants’ anticompetitive conduct."

Additional defendants named in the lawsuit are Clemens Food Group, Hormel Food Corporation, The Clemens Family Corporation, Seaboard Foods LLC, Triumph Foods LLC, Tyson Prepared Foods Inc. and Tyson Fresh Meats Inc.

The newly filed lawsuit is similar to another multi-district lawsuit filed against pork suppliers, wherein both JBS and Smithfield reached settlements.  

TAGS: Business
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