By Victoria Graham, Bloomberg
This Thanksgiving, consumers can give thanks that their turkey, unlike many other meats, isn’t the focus of a federal antitrust price-fixing probe.
Top U.S. enforcers are investigating whether the biggest beef, chicken, salmon, and tuna suppliers conspired to set prices.
Baked hams aren’t free from scrutiny, either. Pork producers Hormel Foods Corp., Smithfield Foods Inc., Tyson Foods Inc., and others have been accused in several putative class actions of working together to manipulate prices.
Food industry consolidation that’s left a handful of companies controlling 80% of livestock production in some markets has made engaging in price fixing simpler, said Claire Kelloway, a food and agriculture researcher at think tank the Open Markets Institute. Mergers mean there are less players to coordinate with, she said.
New technology helps, too. Pork and chicken producers, both of which are subject to Justice Department probes, allegedly use a data subscription service called Agri Stats Inc. to coordinate and monitor each others’ prices, according to several civil suits.
“It makes price fixing easy,” said Austin Frerick, deputy director of Yale University’s antitrust research group, the Thurman Arnold Project. “All you have to do is just log on from your desk.”
Price-fixing schemes are nothing to cluck at since they can lead to higher costs for both consumers and food distributors and also lower profit margins for small food producers, such as local cattle farmers, who contract with national companies.