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January 6, 2020

US turkey giants facing court action over price-fixing claims

Some of the biggest names in the US meat industry are being sued by food distributors over claims they conspired to keep turkey prices artificially high.

By Leonie Barrie

Some of the biggest names in the US meat industry, including Tyson Foods, Cargill and Butterball, are being sued by food distributors and wholesalers who allege that they conspired over a seven year period to keep turkey prices high.

A class action brought by Olean Wholesale Grocery Cooperative and John Gross and Company revolves around the way the turkey producers interacted with a data company called Agri Stats, which produces reports on industry production and pricing.

The plaintiffs, who filed their class action on 18 December in the US District Court in the Northern District of Illinois, allege that between 1 January 2010 and 1 January 2017 the companies used the information provided by Agri Stats in areas such as sales, production levels and capacity to coordinate production cuts to keep turkey prices artificially high.

The court documents show that the distributors, who bought turkey from the defendants during the time period covered by the lawsuit, have a number of witnesses who worked within the turkey industry at the time – for companies named in the lawsuit – who back up their claims.

“As a result of defendants’ unlawful conduct, plaintiffs and the class paid artificially inflated prices for turkey during the class period. Such prices exceeded the amount they would have paid if the price for turkey had been determined by a competitive market,” the plaintiffs allege. 

They are seeking damages in excess of US$5m and a jury trial.

The defendants in the case, which control approximately 80% of the US market for turkeys, are Agri Stats, Butterball, Cargill, Cooper Farms, Farbest Foods, Foster Farms, Hillshire Brands, Hormel Foods, House of Raeford Farms, Kraft Heinz, Perdue Farms and Tyson Foods.

Three alleged ‘co-conspirators’ have also been named in the action. They are Prestage Farms, West Liberty Foods and Circle S-Ranch.

just-food has asked the defendants in the lawsuit for a response.

Hormel Foods said: “Several lawsuits such as these have been filed against other companies in other commodity industries. This lawsuit is without merit and we will vigorously defend our company.”

A spokesperson for House of Raeford Farms said: “We generally do not provide comment on active legal proceedings.”

A spokesperson for Cargill told just-food: “For many years, Cargill has served as a trusted partner to American turkey producers, supporting family farmers and their livelihoods. We believe the claims lack merit.”

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