Inflation may not be the only reason Californians are dealing with high prices at the grocery store.
California Attorney General Rob Bonta announced Monday the state — alongside Minnesota, North Carolina and Tennessee — joined the U.S. Department of Justice’s lawsuit against an agriculture data company, alleging it violated federal antitrust law and facilitated an unlawful increase of certain meat prices.
The lawsuit, originally filed on Sept. 28, accuses Agri Stats, a company that manages anticompetitive information exchanges for meat processors, of providing weekly and monthly reports with competitively sensitive data to subscribing processors of chicken, pork and turkey.
Those processors used the reports to “engage in a coordinated effort to increase prices and reduce output,” according to a release from the state Attorney General’s Office about Monday’s amended complaint filed in federal court in Minnesota.
The participating processors accounted for more than 90% of chicken sales, 80% of pork sales and 90% of turkey sales.
“Because of Agri Stats’ anticompetitive business practices, Californians have been paying more for chicken, pork, and turkey meat than they otherwise would have,” Bonta said in a news release. “Agriculture markets are a lifeblood of the California economy and the cost of putting dinner on the table matters to every family in this state.”
In a news release after the lawsuit was first filed, the company denied the allegations.
“The lawsuit threatens serious harm to American consumers of chicken, pork, and turkey because protein producers depend upon Agri Stats’ reports to help them identify opportunities to reduce production costs to keep prices low,” the company said in the release.
Agri Stats said it has helped lower prices and expand protein production. The company cited the inflation-adjusted price for boneless chicken breasts, saying production output has tripled but that the price is a third of what it was when the company began providing services to chicken producers.
The company was founded in 1985. Data from the Bureau of Labor Statistics shows the price of a boneless chicken breast was about $3.31 in January 2007 (the oldest data available, which would be $5.13 when adjusted for inflation) and $4.23 in September 2023. Prices peaked at about $4.75 in September 2022.
“Nothing about the addition of the four state plaintiffs does anything to overcome DOJ’s failure to show how Agri Stats reports could possibly result in higher prices,” Justin Bernick, an attorney for Agri Stats, said in a statement. “DOJ has done nothing more than parrot the same allegations made by class action plaintiff lawyers that already have been rejected by both a federal judge on summary judgment and a jury after a six-week trial.
“The fact that Minnesota, California, North Carolina, and Tennessee jumped on DOJ’s bandwagon to gang up on a Fort Wayne (Indiana) small business — without ever even asking Agri Stats a single question about the company’s reports— is a sad commentary on their due diligence in antitrust enforcement.”
The lawsuit alleges Agri Stats violated Section 1 of the Sherman Act, the primary federal antitrust law.
The lawsuit says meat processors, who share information about their businesses with Agri Stats, pay the company millions of dollars for reports that use that data so they can increase prices on items that are priced below their rivals, giving them assurance they won’t lose sales to lower-priced competition. It also alleges Agri Stats tells processors how to use those reports to weaken competition, but won’t sell the reports to meat purchasers, farmers, workers or consumers.
“In a fair and competitive economy, meat processors should be vigorously competing with one another — not effectively colluding behind closed doors,” Bonta said.
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