HOUSTON – Broadline foodservice distributor Sysco Corp. is suing major pork processors in federal court for an alleged illegal conspiracy that raised the prices for pork beginning as early as 2009 and continuing through the present.
“One method by which Defendants implemented and executed their conspiracy was by coordinating output and limiting production with the intent and expected result of increasing pork prices in the United States,” Sysco said in its complaint.
“In furtherance of their conspiracy, Defendants exchanged detailed, competitively sensitive, and closely guarded non-public information about prices, capacity, sales volume, and demand, including through their co-conspirator, Defendant Agri Stats,” the complaint said.
The court document noted factors that make the US pork industry conducive to anti-competitive behavior include vertically integrated operations; high barriers to entry limiting competitors from entering the market; consolidation and concentration; inelastic supply and demand; and homogeneity of pork products.
Agri-Stats, Clemens Food Group, Hormel Foods Corp., JBS USA, Smithfield Foods, Triumph Foods, Seaboard Foods and Tyson Foods Inc. were named in the complaint which was filed in US District Court for the Southern District of Texas - Houston Division. Sysco is seeking treble damages under US antitrust laws and a jury trial.
Pork companies previously were targeted in class-action lawsuits brought on behalf of a group of consumers in the US District Court for the District of Minnesota in June of 2018, claiming a price-fixing scheme by food companies to collectively raise pork prices since 2009.
In December 2020, JBS USA and a group of direct purchasers in an ongoing pork price-fixing lawsuit filed a motion for preliminary approval of a settlement of $24.5 million paid into an escrow account to compensate direct purchasers for damages suffered and expenses accrued related to the litigation. A judge approved the settlement in January.
Sysco also filed an antitrust lawsuit against Tyson Foods, Pilgrim’s Pride, Sanderson Farms, Foster Farms and other companies in 2018 alleging the processors fixed prices for broiler chickens.