The Justice Department is seeking to shut down the operations of Agri Stats Inc., alleging it has violated antitrust law by aggregating and sharing a wide range of pricing and other information with major chicken, pork and turkey companies.
The company’s business model “centers on the recruitment of competitors in various agricultural protein industries to participate in anticompetitive information exchanges,” the government said in its 62-page complaint, filed in Minnesota. “This conduct has stabilized and increased prices and reduced output for staple meat items.”
The “scheme,” DOJ said in a news release, “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.”
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,” DOJ said in its release.
“The Justice Department is committed to addressing anticompetitive information exchanges that result in consumers paying more for chicken, pork and turkey,” Assistant Attorney General Jonathan Kanter of DOJ’s Antitrust Division said. “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 has for years produced comprehensive weekly and monthly reports for participating meat processors, which use the data to set prices and output levels,” DOJ said.
“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.”
Agri Stats recently won a decision in Illinois as part of a lawsuit alleging price-fixing by broiler chicken companies. In June, U.S. District Judge Thomas Durkin in the Northern District of Illinois said there was insufficient evidence to show that Agri Stats engaged in a conspiracy to reduce the output and increase the prices of broiler chickens. The case has been in trial this month.
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In a statement provided to Agri-Pulse, Agri Stats said it "strongly denies the allegations in DOJ’s complaint, which already have been rejected by the judge in In re Broiler Chicken Antitrust Litigation. In fact, DOJ investigated Agri Stats a decade ago and closed the investigation after finding no evidence of wrongdoing.
"Agri Stats provides vital benchmarking services that help keep protein production costs and prices low for consumers," the company said. "Since Agri Stats’ founding, protein production has increased significantly, while prices—like prices for boneless skinless chicken breast—have plummeted. DOJ’s lawsuit threatens to unwind these benefits and cause further harm to Americans who already are struggling with inflated food costs."
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