Restaurants Sue Hormel, Others For Alleged Pork Price-Fixing Scheme

Restaurants Sue Hormel, Others For Alleged Pork Price-Fixing Scheme

Buffalo Wild Wings, Sonic Drive-In, and Jimmy John’s have filed suits against a group of meat suppliers for allegedly conspiring to artificially inflate the cost of pork.

Austin, Minn.-based Hormel Foods Corp. is named as one of the defendants in three lawsuits over an alleged pork price-fixing scheme.

Three separate lawsuits filed by Buffalo Wild Wings, Sonic Drive-In, and Jimmy John’s accuse Hormel and other meat suppliers of working with an ag data collection firm “to fix, raise, stabilize, and maintain artificially inflated prices for pork sold in the United States.” The restaurants all operate under the Inspire Brands Inc. umbrella.

The ag data firm in question is Agri Stats Inc., which gathers data from meat processors and then shares confidential weekly reports with them. The restaurants argue that those reports hinder competitive prices. “The type of information available in these reports is not the type of information that competitors would provide to one another in a normal, competitive market,” Buffalo Wild Wings wrote in its complaint.

“Defendant Agri Stats provided a means for the pork integrator defendants to obtain and monitor critical and competitively sensitive business information regarding each other’s production metrics, thereby serving as a central and critical part of defendants’ price-fixing scheme, resulting in a stable and successful anticompetitive cartel,” the complaint read.

JBS USA, which operates a pork production facility in Worthington, Minn., is another defendant in the suit. The list of defendants includes Smithfield Foods Inc., Tyson Foods, and Clemens Food Group LLC.

In the complaints, the restaurants claim that the price-fixing conspiracy has gone on since at least 2009. The plaintiffs are seeking damages from the defendants “for an amount to be determined at trial to the maximum extent allowed.”

The three restaurants all filed their complaints on Nov. 2 in the U.S. District Court for the Southern District of Florida.

Agri Stats has drawn the ire of other companies in the past. In late 2016, the company was sued for allegedly fixing the price of chickens, according to Bloomberg.