Smithfield Foods has agreed to pay $42 million to restaurants and caterers to resolve a claim that the large meat producer engaged in price-fixing for pig.
OMAHA, Nebraska Concerns about how the absence of competition in the market affects meat pricing will certainly increase as a result of Smithfield Foods’ agreement to pay restaurants and caterers $42 million to resolve a lawsuit accusing the large meat producer of colluding to raise pork prices.
On Tuesday, attorneys started alerting businesses impacted by this most recent settlement. Previously, JBS and Smithfield reached a $12.75 million settlement in the pork litigation, while Smithfield settled with a different group of pig customers for $83 million. JBS previously declared it would pay $52.5 million to resolve a comparable beef price-fixing complaint. In those settlements, neither Smithfield nor JBS admitted any wrongdoing, and representatives from Smithfield’s Virginia headquarters declined to comment on the specifics of the agreement.
Producers of chicken have also been named in additional price-fixing lawsuits. In those chicken cases, settlements totaling almost $200 million have been approved.
The restaurant companies that filed the lawsuit said 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 business they allegedly used to communicate private information regarding price, capacity, and demand, are still being sued.
According to the lawsuit, rivals 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 contends that supply and demand considerations, not anticompetitive activity, determine prices, although the White House, a number of senior members of Congress, and trade associations have criticised the industry’s actions.
The Biden administration has launched many initiatives to increase industry competition and assist down food prices, including a $1 billion plan to support the growth of independent slaughterhouses.
A website was also developed early 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 business.
The Smithfield settlement is due to go before a federal judge for approval in October, although he previously gave it preliminary permission in April.
One of the plaintiffs’ attorneys, Blaine Finley, said, “We look forward to moving for final approval of our settlement with Smithfield and continuing to litigate with the remaining defendants.”
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