Cargill Accused of Fixing the Price of Road Salt in Ohio
Ohio Attorney General Mike DeWine on Wednesday filed an antitrust lawsuit against Wayzata-based Cargill, Inc., and Chicago-based Morton Salt, Inc., accusing the two companies of fixing the price of road salt.
The complaint, filed in a Tuscarawas County court in Ohio, alleges that the companies divided up the Ohio rock salt market, agreed not to compete with each other, and drove up rock salt prices over the past decade.
The lawsuit seeks an injunction to prevent the companies from continuing their alleged collaboration-and “disgorgement” of the “ill-gotten gains,” which it said could total as much as $50 million.
Cargill issued a statement on Wednesday, saying that it “emphatically” denies the allegations and is “extremely disappointed by this lawsuit.” Morton also denied the claims.
Cargill pointed out that a 2011 report by Ohio's Office of the Inspector General doesn't support the allegations. The inspector general “did not find evidence that [Cargill and Morton] communicated on salt bids,” according to Cargill.
But the Star Tribune reported that the inspector general's report-which followed a nearly two-year investigation-did conclude that Cargill and Morton engaged in anti-competitive behavior through a “duopoly” that cost the state as much as $59 million in overcharges.
In its statement, Cargill also said that Erie County, Ohio-on behalf of itself and several other state entities-sued the company in 2011, alleging similar anti-competitive claims, but the suit was dismissed.
Both Cargill and Morton operate salt mines in Ohio, and they are the only two companies that mine rock salt within the state and make it available for commercial sale. According to the lawsuit filed by DeWine's office, the companies were consistently awarded jobs from the Ohio Department of Transportation (ODOT)-Ohio's largest rock salt purchaser-partly thanks to an ODOT statute that gives preference to products produced or mined in Ohio. Under the statute, if at least two bidders offered Ohio-mined salt, the one with the lowest price would win the ODOT contract-even if other bidders offered substantially lower prices on non-Ohio-mined salt.
Under the alleged anti-compete agreement between Cargill and Morton, “Morton was predetermined to win certain customers in the State of Ohio, often close to Morton's mine and established distribution network, in exchange for Morton agreeing to refrain from competing with Cargill for a substantial portion of its customers in the remainder of the State of Ohio,” the lawsuit said.
“The lawsuit that my office has filed today reflects my commitment to ensuring that Ohioans' tax dollars don't line the pockets of suppliers who conspire with each other to inflate the prices of the products they sell to the state and its municipalities,” DeWine said in a statement. “And when the product involved is vital to the safety of every family that gets into a car when the roads are snowy or icy-like rock salt-my concern is even greater.”
Cargill is Minnesota's largest private company based on revenue, which totaled $119.5 billion in its most recent fiscal year.