Smithfield Foods Reaches $42M Settlement With Restaurants In Pork Price-Fixing MDL

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Smithfield Foods Pork Price-Fixing MDL Settlement Overview:

• Who: A group of restaurants have reached a $42 million settlement deal with Smithfield Foods.
• Why: The settlement would end claims that Smithfield Food behaved anti-competitively in the pork industry, including participating in price-fixing with other pork companies.
• Where: The settlement deal was filed in a Minnesota federal court.

Smithfield Foods has agreed to pay $42 million and to cooperate in the prosecution of claims against other pork companies to end anti-competition claims against it. 

On Apr. 8, a group of restaurants asked a Minnesota federal judge to approve the settlement reached with Smithfield Foods in a multidistrict litigation over alleged anti-competitive behavior in the pork industry that dates back to 2018.

The settlement would benefit commercial and institutional indirect buyer plaintiffs, according to the motion for preliminary approval.

The deal seeks to compensate anyone that “indirectly bought pork from the defendants or co-conspirators or their respective subsidiaries or affiliates in the U.S.” for their own business use in commercial food preparation, the motion states. 

There are likely hundreds of thousands of class members, the motion states.

The agreement also calls for Smithfield to cooperate with the plaintiffs in their case against the other defendants, including Hormel Foods Corp. and Tyson Foods. 

Pork-Fixing Multidistrict Lawsuit Names Many Companies

In one of the original lawsuits over pork price-fixing lodged in 2018, 12 plaintiffs sued companies Agri Stats Inc., Clemens Food Group LLC, Hormel Foods Corporation, Indiana Packers Corporation, JBS USA, Seaboard Foods LLC, Smithfield Foods Inc., Triumph Foods LLC and Tyson Foods LLC.

The pork integrators are the leading suppliers in the pork industry, which reportedly has about $20 billion in annual commerce, with the defendants and their alleged co-conspirators controlling about 80% of the wholesale pork market.

According to the pork price-fixing class action lawsuit, the defendants were involved in a conspiracy since at least 2009 to fix, raise, maintain and stabilize the price of pork, causing customers in the United States to pay inflated pork prices.

According to the latest settlement with Smithfield, the $42 million will be put in an escrow account, which will also be used to pay attorney’s fees.

The class said the deal is an “excellent result” given the expense and uncertainty of continuing the fight.

In June last year, Smithfield reached an $83 million deal to resolve antitrust claims brought by a proposed class of direct buyers, Law360 reported. And in July 2021, pork producer JBS USA Pork agreed to a $20 million settlement over pork prices that benefits indirect purchasers of pork products in the United States.

What do you think of this settlement for restaurants? Let us know in the comments! 

The plaintiffs are represented by Shawn M. Raiter of Larson King LLP and Jonathan W. Cuneo and Blaine Finley of Cuneo Gilbert & LaDuca LLP.

The Smithfield Pork Settlement is In Re: Pork Antitrust Litigation, Case No. 0:18-cv-01776, in the U.S. District Court for the District of Minnesota.

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