In early May, the Department of Justice (DOJ) filed a proposed settlement to resolve the U.S.’ claims against Agri Stats Inc. for unlawful information sharing of prices, output and costs among competing meat processors.
“A fair market depends on real competition, not privileged access to competitors’ playbooks,” said Associate Attorney General Stanley Woodward. “When dominant firms share sensitive data in ways that exclude buyers and the public, they gain an artificial advantage that weakens market discipline and drives up prices for everyday Americans.”
The U.S. was joined by attorneys general from California, Minnesota, North Carolina, Tennessee, Texas and Utah in a May 7 proposed settlement filed in the U.S. District Court for the District of Minnesota.
The DOJ filed suit against Agri Stats in the fall of 2023, later joined by the attorneys general, alleging Agri Stats was in violation of the Sherman Act for anticompetitive behaviors.
Settlement background
The DOJ said the proposed settlement will “help lower food prices, undo decades of distorted competition in the broiler chicken market, and ensure that the pork and turkey markets remain free from these anticompetitive practices that harmed American consumers across the country.”
Agri Stats operates in the broiler chicken market and collects information on prices, output and costs from meat processors’ accounting systems, standardizes the data, and redistributes it back to the processors, DOJ said. The department noted that Agri Stats and meat processors have historically refused to share the information with meat buyers.
“When companies decide certain information is too sensitive to share with the broader market, but not too sensitive to share with their closest competitors, that is a significant red flag that competition is being harmed,” said Acting Assistant Attorney General Omeed A. Assefi of the DOJ Antitrust Division.
The DOJ said the one-sided information exchange reduced competition and enabled systematic price increases and coordinated decisions about meat supplies.
Settlement details
If approved by the court, the settlement requires the following of Agri Stats:
• Stop providing any sales reports or non-public pricing information.
• Stop reporting production, cost and labor data at either the company or facility level.
• Make most information distributed available to all interested domestic purchasers on reasonable and non-discriminatory terms.
• Adhere to restrictions on the timeliness of the information shared.
• Report to a court-approved monitor selected by the DOJ to ensure compliance with the settlement.
• Establish an antitrust compliance program to ensure data security, whistleblower protections and mandatory reporting of any future potential violations of the antitrust laws.
Public comments may be submitted about the proposed settlement within 60 days of its publishing in the Federal Register. Once the public comment period ends, the District Court for the District of Minnesota may enter final judgment.
Texas joins packer investigation
In related news, Texas Attorney General Ken Paxton announced in mid-May that the state would join the DOJ in an investigation against the country’s biggest meatpackers.
“If major meatpackers manipulated the market to underpay ranchers while forcing families to pay higher prices at the grocery store, we will hold them accountable,” Paxton said. “My office will aggressively investigate any violations of antitrust law to protect fair competition, ranchers, and Texas consumers.”
Paxton encouraged any potential antitrust violation concerns to be reported to the Office of the Attorney General’s Antitrust Division at antitrust@oag.texas.gov.
In early May, the DOJ confirmed it was investigating the nation’s largest meatpackers for possible antitrust violations.
Tyson moves forward with settlement
On May 14, Tyson Foods received preliminary approval for its $82.5 million settlement in a class action lawsuit with plaintiffs who alleged meatpacking companies inflated the price of beef.
The settlement was “arrived at by arm’s-length negotiations by experienced counsel with the assistance of an experienced mediator, falls within the range of possible approval and is hereby preliminarily approved,” Judge John R. Tunheim of the U.S. District Court for the District of Minnesota wrote in an order.
The settlement class includes anyone who purchased beef from the company or its affiliates from January 2015 through February 2020. Settlement claims may be submitted through Nov. 30 once the settlement is fully approved. — Anna Miller Fortozo, WLJ managing editor
