US consumers sue Hormel, etc. over inflated pork prices

MINNEAPOLIS — A federal lawsuit filed on Thursday in Minnesota alleged that Hormel Foods Corp. and other companies colluded to inflate consumer pork prices on such popular products as Ball Park Franks, Spam, and Nathan’s Famous.

Defendants in the proposed class-action lawsuit included Hormel, based in Austin, Minnesota, and eight other companies, including Tyson Foods, JBS USA, and Smithfield Foods.

The law firm bringing the case, Seattle-based Hagens Berman , accused the companies of price-fixing that forced consumers to pay high prices for bacon, ham, and other pork products.

The lawsuit alleged the companies coordinated their output and limited production “with the intent and expected result of increasing pork prices in the United States,” and also exchanged “competitively sensitive” and “closely guarded non-public information” about prices, capacity, sales volume, and demand.

In 2009, Indiana-based Agri Stats, a provider of data services to agricultural industries, approached the pork companies about creating a benchmarking report that would include financial information, slaughter rates, and supply levels, according to the lawsuit.

While benchmark reports are a legal industry tool for gauging a company’s performance, the suit alleged the goal was for the companies to use the information to monitor each other’s production and pricing “so as to maintain a reduction of production and an increase of price.”

Hormel, maker of Spam luncheon meat, called the allegation erroneous.

“We are confident that any allegations such as these are completely without merit. We intend to vigorously defend this lawsuit,” Hormel said in a statement to the Star Tribune.

A spokesman for Tyson told The Associated Press in an email on Thursday that the Springdale, Arkansas-based company had not received formal notice of the lawsuit and could not comment.

Other defendants include Clemens Food Group, Indiana Packers Corp., Seaboard Foods, and Triumph Foods.

The lawsuit lists a dozen consumers from Minnesota and several other states as plaintiffs. Affected brands include Ball Park Franks, Hillshire Farm, Jimmy Dean, Spam, and Nathan’s Famous.   /kga