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Sysco Accuses Tyson, JBS, Hormel of Pork Price-Fixing Scheme (1)

March 10, 2021, 5:51 PMUpdated: March 10, 2021, 7:17 PM

Sysco Corp. sued Tyson Foods Inc., JBS SA, Hormel Foods Corp., and other leading pork processors in a Houston federal court, alleging an industrywide conspiracy to raise prices by laundering secret information through proprietary agricultural databases.

Exchanges of “detailed, competitively sensitive, and closely guarded nonpublic” data about “capacity, sales, volume, and demand,” including the “profits, prices, costs, and production levels” of specific companies, are a “classic” way to implement and enforce “a price-fixing scheme,” the complaint says.

In addition to Tyson, JBS, Hormel, and “information sharing service” Agri Stats Inc., the antitrust lawsuit filed by Sysco—a top food distributor—targets affiliates of Clemens Family Corp., Seaboard Corp., and Smithfield Foods Inc. The companies allegedly control about 80% of the U.S. pork wholesale sector.

Tyson declined to comment Wednesday. The other companies didn’t immediately respond to requests for comment.

The complaint, docketed Tuesday in the U.S. District Court for the Southern District of Texas, echoes claims from a case that’s advancing in a Minneapolis federal court after an October ruling in favor of the wholesalers, retailers, and consumers leading the proposed class action.

The judge hearing the Minnesota suit has tentatively approved a $24.5 million settlement resolving wholesaler claims against JBS. Seaboard also faces related allegations in Delaware, where an investor sued it in December seeking to investigate its role in the scheme.

The cases are part of a wave of cartel suits involving livestock and protein, including chicken, beef, turkey, tuna, salmon, and eggs. Tuna and chicken executives are also facing actual or potential prison time in connection with the price-fixing allegations.

Cause of Action: Section 1 of the Sherman Act.

Relief: Treble damages, an injunction, costs and fees.

Attorneys: Sysco is represented by Boies Schiller Flexner LLP.

The case is Sysco Corp. v. Agri Stats Inc., S.D. Tex., No. 21-cv-773, complaint filed 3/9/21.

(Updates fourth paragraph to indicate that Tyson declined to comment.)

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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