NORTH CAROLINA — An inflationary practice that led to escalated pricing in meats, specifically turkey, chicken and pork, is coming to an end after a settlement agreement was put forth with the justice department and numerous state attorneys general.
The lawsuit states Agri Stats violated the Sherman Act “by operating an unlawful information exchange that contributed to higher prices” the specific meat markets.
According to North Carolina AG Jeff Jackson, a bipartisan group came together to “shut down a secret data exchange used by processors” nationwide. Broiler chicken productions like Tyson Foods, Perdue Farms and Smithfield Foods, which handle 95% of the nation’s processing, paid for exclusive data from Agri Stats to allegedly facilitate anti-competitive pricing.
An Indiana consulting company, Agri Stats gives benchmark reports on inventory, costs and pricing, and supply and capacity, allegedly facilitating anti-competitive pricing. The lawsuit claims reports of a clients’ sales, live production, processing, and profits were sold to participating processors, in order to coordinate higher prices for meat.
For instance, a report could provide numbers on future inventories, so processors could see if supply would be low and inflate pricing accordingly. The complaint added the reports were only sold to processors, but not grocery stores, restaurants, farmers, or workers. Thus, negotiations were one-sided.
“This is exactly the kind of rigged game that upsets people, and we’re here to take it down,” Jackson said in the release. “Families paid higher prices so a handful of companies could profit off information no one else was allowed to see. That’s not a market, it’s an illegal conspiracy — and we just ended it.”
Agri Stats President Eric Scholer combatted the narrative and said chicken processors — the company dropped pork and turkey information exchanges due to antitrust lawsuits — made only about 4 cents of profit per pound of meat sold.
“The only way those companies can continue to keep prices low for consumers and remain in business is to make their operations as efficient as possible, and Agri Stats helps them to do exactly that,” Scholer said in a statement regarding the settlement.
The company settled without admitting wrongdoing, as the lawsuit was scheduled to go to trial this month.
According to the AG’s office, the North Carolina Department of Justice filed the antitrust lawsuit in November 2023 under the Biden administration in the U.S. District Court for the District of Minnesota. Joining were the U.S. Department of Justice and attorneys general of California, Minnesota, Tennessee, Texas, and Utah.
The settlement comes with a $350,000 fine, bars Agri Stats from producing sales reports and ranking metrics, and bars the company from publishing information that allows other processors to identify the contributing entity.
Plus, Agri Stats is required to make reports publicly available for purchase and create a more competitive market. It will be monitored for seven years and must adopt an antitrust compliance program, according to the settlement.
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