July 6, 2022
Smithfield Foods to pay US$42 million to settle pork price-fixing lawsuit
US major pork producer Smithfield Foods is expected to pay US$42 million to restaurants and caterers to settle a pork price-fixing lawsuit, which alleges the firm is responsible for conspiring to inflate pork prices, the Associated Press reported.
Smithfield Foods previously settled US$83 million with a different group of pork buyers, while JBS paid US$12.75 million to the restaurants and caterers In the pork lawsuit. Earlier in 2022, JBS said it will pay US$52.5 million to settle a beef price-fixing lawsuit.
Neither Smithfield Foods or JBS admitted to be at fault in these settlements. Officials from both companies declined to comment.
Chicken producers have also been charged with price-fixing lawsuits. Close to US$200 million in settlements have been green-lit in those chicken cases.
The restaurant companies that filed the lawsuit claimed that the meat processors, who are in charge of more than 70% of the pork produced, conspired to raise prices between 2009 and this year by limiting the supply of hogs.
Other significant pork producers, such as Hormel, Tyson Foods, Seaboard Foods, and Triumph Foods, as well as the Agri Stats database company they allegedly used to share private information about price, capacity, and demand, are still being sued.
According to the lawsuit, competitors were able to compare their profits and helped regulate the supply and price of pork thanks to the private information in those reports.
The meat industry argues that supply and demand factors, not anticompetitive behaviour, determine prices, but the White House, a number of prominent members of Congress, and trade associations have criticised the industry's practises.
The Biden administration has announced several initiatives to increase industry competition and help lower food prices, including a US$1 billion plan to support the growth of independent slaughterhouses.
A website was also developed earlier this year by the U.S. Departments of Justice and Agriculture to make it simpler for farmers and ranchers to report any concerns about anticompetitive behaviour in the industry.
- Associated Press