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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

U.S. Department of Justice Displaying Inquisitorial Zealotry Over Alleged Collusion

12/28/2023

Under the current U.S. Department of Justice (DOJ), a number of senior administrators see collusion and antitrust activity in many aspects of agribusiness.  According to news reports, Michael Kades, Deputy Assistant Attorney General for the Antitrust Division commented on the need for “more effective enforcement”.  He expressed frustration at an international meeting in Brussels, Belgium “with the necessity of litigating cases that should be self-evident”. 

 

The DOJ has been successful in negotiating high settlement figures from many integrators but has been thwarted at trial in cases alleging collusion on pricing. This is evidenced by the October verdict exonerating Sanderson Farms under its previous ownership, although subject to appeal.  Companies that did settle with the Department of Justice collectively paid close to $300 million with Pilgrim’s Pride and Tyson Foods paying approximately $77 million each. The DOJ failed to obtain convictions in cases brought against executives of broiler integrators accused of colluding too rig contracts and prices.

 

Kades is probably on firmer ground in his case against a group of broiler producers who exchanged information on labor rates at a succession of private discussions conducted during poultry association meetings.  Kades also alluded to indirect collusion from a major industry benchmarking system to which pork, chicken and turkey processors subscribe.

 

It is currently of benefit to state Attorneys General and the Department of Justice to pursue alleged antitrust activities since this results in large settlements although without acknowledgment of guilt.


 
Copyright © 2024 Simon M. Shane