Pork producers win dismissal of price-fixing lawsuits - U.S. judge

(Reuters) - A federal judge on Thursday dismissed antitrust lawsuits accusing several U.S. pork companies of conspiring to limit supply in the $20 billion-a-year market, in order to inflate prices and their own profits at the expense of consumers and other purchasers.

Chief Judge John Tunheim of the federal court in Minneapolis said the plaintiffs failed to show “parallel conduct” among the companies, whose combined U.S. market share exceeds 80%, to suggest they had conspired beginning in 2009 to fix prices.

The defendants included Hormel Foods Corp, the JBS USA unit of Brazil’s JBS SA, WH Group Ltd’s Smithfield Foods Inc, and Tyson Foods Inc, among others, as well as data provider Agri Stats Inc.

They said the plaintiffs failed to allege any agreement to rig prices, and that supply and capacity actually increased.

Tunheim’s decision covered 13 lawsuits brought by consumers who bought pork at grocery stores and other retailers for their own use, “direct” purchasers of pork, and “indirect” purchasers who bought pork for commercial food preparation.

The dismissal was without prejudice, meaning the plaintiffs can amend their complaints.

Brian Clark, a lawyer for the direct purchasers, said his clients expect to amend their complaint. Lawyers for the other plaintiffs did not immediately respond to requests for comment.

According to the plaintiffs, the producers manipulated pork prices by publicly touting the need to cut production, thereby signaling to each other that the conspiracy was on, and by sharing price, capacity, sales and demand data via Agri Stats.

But the judge found the plaintiffs’ allegations of illegal conduct “sparse and conclusory.”

He said they focused mainly on industry data and vague public statements, and were bereft of specific allegations that any producer other than Smithfield lowered pork production.

“It may be true that some of these defendants cut production in the years following 2009. It may also be true that all of these defendants cut production,” he wrote. “The fact that the complaints contain this ambiguity is exactly the problem.”

The lawsuits resemble private litigation in Chicago federal court where many companies including Tyson and JBS’ majority-owned Pilgrim’s Pride have been accused of conspiring to fix broiler chicken prices.

In June, the U.S. government revealed it had opened a criminal probe into alleged poultry price-fixing, which producers have denied.

Tyson said on Monday it received a grand jury subpoena related to the poultry probe and is cooperating.

The case is In re Pork Antitrust Litigation, U.S. District Court, District of Minnesota, No. 18-01776.

Reporting by Jonathan Stempel in New York; editing by Bill Berkrot and Lisa Shumaker