June 28, 2018 / 10:18 PM / 22 days ago

Lawsuit claims US pork companies conspired to inflate prices

June 28 (Reuters) - Several large U.S. pork companies were hit with an antitrust lawsuit on Thursday, accusing them of conspiring to inflate pork prices in an effort to boost profit at consumers' expense.

Nine defendants including Hormel Foods Corp, the JBS USA unit of Brazil's JBS SA, WH Group Ltd's Smithfield Foods Inc and Tyson Foods Inc were accused of colluding since 2009 to limit production, with the "intent and expected result" of increasing pork prices.

Thirteen individual consumers from around the country are seeking class-action status and a variety of damages for alleged overcharges since Jan. 1, 2009, in a complaint filed with the federal court in Minnesota.

According to the complaint, U.S. pork sales totaled $18.9 billion in 2016, and the defendants and their co-conspirators control more than 80 percent of the wholesale market.

Hormel said it intended to defend itself, and was confident that the allegations have no merit. Tyson spokesman Gary Mickelson declined to comment. JBS and Smithfield did not immediately respond to requests for comment.

The case resembles litigation in Chicago federal court where consumers accused many companies, including Tyson and JBS' majority-owned Pilgrim's Pride, of conspiring to fix broiler chicken prices.

According to Thursday's complaint, the pork conspiracy began when the defendant Agri Stats Inc began giving pork companies "benchmarking" reports, which typically allow comparisons of profits and performance.

But the consumers said Agri Stats went farther, offering "sensitive" data on costs, prices and slaughter rates and the ability to decipher which data belonged to which companies.

They said this permitted the pork companies to monitor each other's production, and as a result control supply and price.

"The provision of this detailed information acts as the proverbial smoke-filled room of the cartels of yesteryear," the complaint said.

Agri Stats is also a defendant in the broiler chicken case. It did not immediately respond to a request for comment.

Thursday's lawsuit was assigned to U.S. District Judge Susan Richard Nelson in St. Paul.

The case is Duryea et al v. Agri Stats Inc et al, U.S. District Court, District of Minnesota, No. 18-01776.

Reporting by Jonathan Stempel in New York; Additional reporting by Theopolis Waters in Chicago

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