Posted on 08/31/2024 2:49:09 PM PDT by nickcarraway
Agri Stats, the data analytics and consulting company, unlawfully collected competitive industry data. Here's what to know.
If the price of meat — specifically chicken, pork, and turkey — feels incredibly high right now, that's because it is. Though it may have little to do with actual supply or demand.
In May, a judge ruled that the data analytics and consulting company Agri Stats must face a lawsuit that accused the company of a price-fixing scheme that included major chicken, pork, and turkey processors across the U.S. In August, the company attempted to have the lawsuit thrown out, only to have a judge once again reject its request.
According to Reuters, in May, U.S. District Judge John Tunheim in Minnesota first denied the motion for dismissal of the suit brought forth by the U.S. Department of Justice (DOJ) and six individual states. Tunheim ruled that the Justice Department's antitrust claims were sufficient to move forward.
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The lawsuit alleges that the company unlawfully collected competitive industry data and shared it with its subscribers — who pay millions to access the data — then used that information to keep its prices inflated to "artificially high" levels.
"The complaint alleges that Agri Stats violated Section 1 of the Sherman Act by collecting, integrating, and distributing competitively sensitive information related to price, cost, and output among competing meat processors," the DOJ's press release on the lawsuit reads. "This conduct harms customers, including grocery stores and American families."
The DOJ's release on the case also noted that the data included information on sales pricing, fixed costs like worker and farmer compensation, and output by individual companies. Participating processors in the data sharing account for "more than 90% of broiler chicken sales, 80% of pork sales and 90% of turkey sales in the United States," it added.
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"The complaint further alleges that Agri Stats understood that meat processors have used these reports for anti-competitive purposes and, in some instances, even encouraged meat processors to raise prices and reduce supply," the DOJ explained. "While distributing troves of competitively sensitive information among participating processors, Agri Stats withholds its reports from meat purchasers, workers, and American consumers, resulting in an information asymmetry that further exacerbates the competitive harm of Agri Stats’ information exchanges."
Agri Stats has denied any wrongdoing, telling Agriculture Drive in 2023 that it has played a "vital" role in lowering the cost of these products instead.
“DOJ’s lawsuit threatens to unwind these benefits and cause further harm to Americans who already are struggling with inflated food costs,” Justin Bernick, a partner at Hogan Lovells representing Agri Stats, stated.
In August, More Perfect Union released a deep dive on the topic, which is well worth 10 minutes of your time to watch right now.
I got out of the Navy in 1965, got married and bought a home in 73, brand new three bedroom brick home with central heat & air for $15,000. Can hardly get air conditioning installed for that today. I was remembering, after looking at bread prices, in 1954, there was a Dairy Queen that sold 15 hamburgers for a dollar on Thursday, that would be 2 packages of buns plus hamburger, for the price of a couple hamburger buns today.
The same article?
LOL, now that you say that, I may have to go back and look...but I think not, the dates don’t match up.
That said, I don’t for a second believe the high prices of groceries is due to either price fixing or price gouging, if my definitions are correct.
And I think anyone who says it is has no idea what they are talking about, or worse...know exactly what they are talking about, and demonizing an entity (in this case) such as grocery stores so that they can gin up sentiment for implementing price controls from the government.
Under my definitions, “price fixing” would be Piggly Wiggly, Safeway, and Aldis having a meeting and jointly deciding what they were going to charge for groceries in a given area such as Northern Virginia, and all agreeing not to charge less and thus undercut the other two.
That would be be price fixing IMO, and I don’t think it is ANYTHING like that.
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