Case: 1:21-cv-06553 Document #: 1 Filed: 12/08/21 Page 1 of 55 PageID #:1
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
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`COMPLAINT FOR VIOLATION OF
`THE ANTITRUST LAWS
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`Jury Trial Demanded
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`UNIPRO FOODSERVICE, INC.,
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`Plaintiff,
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`-vs.-
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`AGRI STATS, INC.; CLEMENS FOOD
`GROUP, LLC; CLEMENS FAMILY
`CORPORATION; HORMEL FOODS
`CORPORATION; HORMEL FOODS LLC;
`JBS USA FOOD COMPANY; SEABOARD
`FOODS LLC; SEABOARD
`CORPORATION; SMITHFIELD FOODS,
`INC.; TRIUMPH FOODS, LLC; TYSON
`FOODS, INC.; TYSON PREPARED
`FOODS, INC.; and TYSON FRESH
`MEATS, INC.,
`
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`Defendants.
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`

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`Case: 1:21-cv-06553 Document #: 1 Filed: 12/08/21 Page 2 of 55 PageID #:2
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`TABLE OF CONTENTS
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`Page(s)
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`I.
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`NATURE OF ACTION ...................................................................................................... 1
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`II.
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`JURISDICTION AND VENUE ......................................................................................... 3
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`III.
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`PARTIES ............................................................................................................................ 4
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`A.
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`B.
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`Plaintiff ................................................................................................................... 4
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`Defendants .............................................................................................................. 4
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`a.
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`b.
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`c.
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`d.
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`e.
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`f.
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`g.
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`h.
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`i.
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`Agri Stats .................................................................................................... 4
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`Clemens....................................................................................................... 5
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`Hormel ........................................................................................................ 6
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`JBS .............................................................................................................. 7
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`Seaboard ...................................................................................................... 7
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`Smithfield .................................................................................................... 8
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`Triumph....................................................................................................... 8
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`Tyson........................................................................................................... 8
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`Co-Conspirators .......................................................................................... 9
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`IV.
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`FACTUAL ALLEGATIONS ........................................................................................... 10
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`A.
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`B.
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`Agri Stats’ Detailed Reports Enable the Producer Defendants to
`Accurately Assess and Monitor their Competitors’ Production Levels ................ 13
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`The Producer Defendants’ Control Over the Production and Supply of
`Pork in the United States....................................................................................... 18
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`V.
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`THE PRODUCER DEFENDANTS’ CURTAILMENT OF PORK
`PRODUCTION ................................................................................................................. 32
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`a.
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`b.
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`c.
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`Smithfield .................................................................................................. 34
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`Tyson......................................................................................................... 35
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`JBS ............................................................................................................ 35
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`i
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`d.
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`e.
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`f.
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`g.
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`h.
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`Hormel ...................................................................................................... 35
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`Seaboard .................................................................................................... 36
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`Triumph..................................................................................................... 36
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`Clemens..................................................................................................... 37
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`Co-Conspirator Indiana Packers ............................................................... 37
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`VI. ABNORMAL PRICING AND THE EFFECT ON PLAINTIFF IN THE FORM
`OF HIGHER PRICES ....................................................................................................... 45
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`VII. OVERCHARGES FROM THE CARTEL REFLECTED IN HIGHER PORK
`PRICES PLAINTIFF PAID .............................................................................................. 46
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`VIII. TOLLING OF THE STATUTE OF LIMITATIONS ....................................................... 47
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`IX. ANTITRUST INJURY ..................................................................................................... 48
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`X.
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`VIOLATION OF SECTION 1 OF THE SHERMAN ACT ............................................. 49
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`XI.
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`REQUEST FOR RELIEF ................................................................................................. 50
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`XII.
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`JURY TRIAL DEMANDED ............................................................................................ 51
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`
`
`ii
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`Plaintiff UniPro Foodservice, Inc. (“Plaintiff”), by and through its undersigned attorneys,
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`files this Complaint against Defendants Agri Stats, Inc. (“Agri Stats”), Clemens Food Group, LLC,
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`The Clemens Family Corporation (“Clemens”), Hormel Foods Corporation, Hormel Foods, LLC
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`(“Hormel”), JBS USA Food Company (“JBS” or “JBS USA”), Seaboard Foods LLC, Seaboard
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`Corporation (“Seaboard”), Smithfield Foods, Inc. (“Smithfield”), Triumph Foods, LLC
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`(“Triumph”), Tyson Foods, Inc., Tyson Prepared Foods, Inc., and Tyson Fresh Meats, Inc.
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`(“Tyson”). Plaintiff brings this action against Defendants for treble damages under the antitrust
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`laws of the United States and demands a trial by jury.
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`I.
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`NATURE OF ACTION
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`1.
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`The pork producer defendants are the leading suppliers of pork in an industry with
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`approximately $20 billion in annual commerce in the United States. The United States pork
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`industry is highly concentrated, with a small number of large companies controlling the supply.
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`Defendants and their co-conspirators collectively control over 80 percent of the wholesale pork
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`market.
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`2.
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`Defendants Agri Stats, Clemens, Hormel, JBS, Seaboard, Smithfield, Triumph, and
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`Tyson entered, along with Co-Conspirator Indiana Packers Corporation, into a conspiracy from at
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`least 2009 to the present (the “Conspiracy Period”) to fix, raise, maintain, and stabilize the price of
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`pork.1 The defendants, other than Agri Stats, are collectively referred to here as the “Producer
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`Defendants.”
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`1 For the purposes of this complaint, “pork” includes pig meat purchased fresh or frozen,
`smoked ham, sausage, and bacon. From time to time in this complaint, “pork” and “swine” are
`used interchangeably, particularly when referring to the pork or swine industry.
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`1
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`3.
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`One method by which Defendants implemented and executed their conspiracy was by
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`coordinating output and limiting production with the intent and expected result of increasing pork
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`prices in the United States.
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`4.
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`In furtherance of their conspiracy, the Producer Defendants exchanged detailed,
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`competitively sensitive, and closely guarded non-public information about prices, capacity, sales
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`volume, and demand, including through their co-conspirator, defendant Agri Stats.
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`5.
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`Beginning in at least 2009, Defendant Agri Stats began providing highly sensitive
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`“benchmarking” reports to the Producer Defendants. Benchmarking allows competitors to compare
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`their profits or performance against that of other companies. Yet Agri Stats’ reports are unlike those
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`of lawful industry reports; rather, Agri Stats gathers detailed financial and production data from each
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`of the Producer Defendants and their Co-Conspirator Indiana Packers, standardizes this information,
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`and produces customized reports and graphs for the conspirators. The type of information available in
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`these reports is not the type of information that competitors would provide each other in a normal,
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`competitive market.
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`6.
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`On at least a monthly basis, and often far more frequently (e.g., weekly or every other
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`week), Agri Stats provides the Producer Defendants with current and forward-looking sensitive
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`information (such as profits, costs, prices and slaughter information), and regularly provides the keys
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`to deciphering which data belongs to which participant. The effect of this information exchange was
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`to allow the pork producers to monitor each other’s production, and therefore control supply and price
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`in furtherance of their anticompetitive scheme.
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`7.
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`The data exchanged through Agri Stats also bears all the hallmarks of the
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`enforcement and implementation mechanism of a price-fixing scheme. First, the data is current and
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`forward-looking – which courts have consistently held has “the greatest potential for generating
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`2
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`anticompetitive effects.” Second, information contained in Agri Stats reports is specific to pork
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`producers, including information on profits, prices, costs, and production levels; instead of being
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`aggregated as industry averages to avoid transactional specificity and the easy identification of specific
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`producers. Third, none of the Agri Stats information was publicly available. Agri Stats is a
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`subscription service which required the co-conspirators to pay millions of dollars over the Conspiracy
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`Period – far in excess of any other pricing and production indices. Agri Stats ensured that its detailed,
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`sensitive business information was available only to the co-conspirators and not to any buyers in the
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`market. Defendants utilize the information exchanges through Agri Stats in furtherance of their
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`conspiracy to fix, raise, stabilize, and maintain artificially inflated prices for pork sold in the United
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`States.
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`8.
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`Defendants’ restriction of pork supply had the intended purpose and effect of increasing
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`pork prices to Plaintiff. As a result of Defendants’ unlawful conduct, Plaintiff paid artificially inflated
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`prices for pork during the Conspiracy Period. Such prices exceeded the amount they would have paid
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`if the price for pork had been determined by a competitive market. Thus, Plaintiff was injured in their
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`businesses or property by Defendants’ unlawful conduct.
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`II.
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`JURISDICTION AND VENUE
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`9.
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`This action arises under Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 4
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`of the Clayton Act, 15 U.S.C. § 15(a), and seeks to recover treble damages, costs of suit, and
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`reasonable attorneys’ fees for the injuries sustained by Plaintiff resulting from Defendants’
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`conspiracy to restrain trade in the pork market. The Court has subject matter jurisdiction under 28
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`U.S.C. §§ 1331, 1337(a), 1407, and 15 U.S.C. § 15.
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`10. Venue is proper in this District under 15 U.S.C. §§ 15(a); 22 and 28 U.S.C. §§
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`1391(b); (c); and (d) because during the relevant period, Defendants resided, transacted business,
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`3
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`were found, or had agents in this District, and a substantial portion of Defendants’ alleged wrongful
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`conduct affecting interstate trade and commerce was carried out in this District.
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`11. Defendants are amenable to service of process under Fed. R. Civ. P. 4(k)(1)(A) and
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`the Illinois long-arm statute 734 Ill. Comp. Stat. 5/2-209 because each Defendant has transacted
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`business in this state and because the Illinois long-arm statute extends jurisdiction to the limits of
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`Due Process, and each Defendant has sufficient minimum contacts with the state of Illinois to
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`satisfy Due Process.
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`12. This Court has personal jurisdiction over each Defendant because each Defendant –
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`throughout the U.S. and including in this District and the state of Illinois – has transacted business,
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`maintained substantial contacts, or committed overt acts in furtherance of its illegal scheme and
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`conspiracy. The alleged scheme and conspiracy have been directed at, and had the intended effect
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`of, causing injury to persons and entities residing in, located in, or doing business throughout the
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`U.S., including in this District and the state of Illinois.
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`III.
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`PARTIES
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`A.
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`Plaintiff
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`13. Plaintiff UniPro Foodservice, Inc. (“Plaintiff”) is a Delaware corporation with its
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`principal place of business in Atlanta, Georgia. Plaintiff and/or its affiliates purchased pork at
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`artificially inflated prices directly from one or more Producer Defendants, and/or their affiliates or
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`agents, and suffered injury to its business or property as a direct or proximate result of all
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`Defendants’ wrongful conduct.
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`B.
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`Defendants
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`a.
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`Agri Stats
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`20.
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`Agri Stats, Inc. is an Indiana corporation located in Fort Wayne, Indiana and was,
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`for a portion of the Conspiracy Period, a subsidiary of Eli Lilly & Co., a publicly held corporation
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`headquartered in Indianapolis. Agri Stats is now a wholly owned subsidiary of Agri Stats Omega
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`Holding Co, LP, a limited partnership based in Indiana. Agri Stats is a co-conspirator of the
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`Producer Defendants and has knowingly played an important and active role as participant in, and
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`a facilitator of, Defendants’ collusive scheme detailed in this Complaint. Agri Stats has a unique
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`and deep relationship with the pork industry generally, and specifically with each of the
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`Defendants identified below, all of which are Agri Stats’ primary customers. Defendants Clemens,
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`Hormel, JBS USA, Seaboard, Triumph, Smithfield and Tyson, and Co-Conspirator Indiana
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`Packers, are all Agri Stats subscribers and report a wide variety of information to Agri Stats, which,
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`according to a 2016 Eli Lilly earnings call, is used by “over 90% of the poultry and pig market” in
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`the United States.
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`21.
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`All of Agri Stats’ wrongful actions described in this Complaint are part of, and in
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`furtherance of, the unlawful conduct alleged herein, and were authorized, ordered, or engaged in
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`by Agri Stats’ various officers, agents, employers or other representatives while actively engaged
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`in the management and operation of Agri Stats’ business affairs within the course and scope of
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`their duties and employment, or with Agri Stats’ actual apparent or ostensible authority. Agri Stats
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`used the instrumentalities of interstate commerce to facilitate the conspiracy, and its conduct was
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`within the flow of, was intended to, and did have, a substantial effect on the interstate commerce
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`of the U.S., including in this District.
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`b.
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`Clemens
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`22.
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`Clemens Food Group, LLC is a limited-liability company headquartered in
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`Hatfield, Pennsylvania. During the Conspiracy Period, Clemens Food Group, LLC and/or its
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`predecessors, wholly owned or controlled subsidiaries, or affiliates sold pork in interstate
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`commerce, directly or through its wholly owned or controlled affiliates, to purchasers in the United
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`States, including in this District.
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`23.
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`The Clemens Family Corporation is a Pennsylvania corporation headquartered in
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`Hatfield, Pennsylvania, and the parent company of Clemens Food Group, LLC. During the
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`Conspiracy Period, The Clemens Family Corporation and/or its predecessors, wholly owned or
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`controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or through its wholly
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`owned or controlled affiliates, to purchasers in the United States, including in this District.
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`24.
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`The Clemens Food Group, LLC and the Clemens Family Corporation are
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`collectively referred to here as “Clemens.” Clemens reports a wide variety of pork data to Agri
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`Stats, including, without limitation, highly detailed, confidential information regarding its
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`production and sales of pork.
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`c.
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`Hormel
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`25.
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`Hormel Foods Corporation is a Delaware corporation headquartered in Austin,
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`Minnesota. During the Conspiracy Period, Hormel Foods Corporation and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates, including but not limited to Hormel Foods,
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`LLC sold pork in interstate commerce, directly or through its wholly owned or controlled affiliates,
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`to purchasers in the United States, including in this District.
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`26.
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`Hormel Foods, LLC is a Minnesota corporation headquartered in Austin,
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`Minnesota. Hormel Foods, LLC is a wholly owned subsidiary of Defendant Hormel Foods
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`Corporation. During the Conspiracy Period, Hormel Foods Corporation and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or
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`through its wholly owned or controlled affiliates, to purchasers in the United States, including in
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`this District.
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`27.
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`Hormel Foods, LLC and Hormel Foods Corporation are collectively referred to
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`here as “Hormel.” Hormel reports a wide variety of pork data to Agri Stats, including, without
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`limitation, highly detailed, confidential information regarding its production and sales of pork.
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`6
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`d.
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`JBS
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`28.
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`JBS USA Food Company is one of the world’s largest beef and pork processing
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`companies and a wholly owned subsidiary of JBS USA Food Company Holdings, which holds a
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`78.5 percent controlling interest in Pilgrim’s Pride Corporation, one of the largest chicken-
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`producing companies in the world, which recently plead guilty to antitrust violations in the
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`chickens market. JBS USA Food Company is a Delaware corporation, headquartered in Greeley,
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`Colorado, and reports a wide variety of pork data to Agri Stats, including, without limitation,
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`highly detailed, confidential information regarding its production and sales of pork. During the
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`Conspiracy Period, JBS USA Food Company and/or its predecessors, wholly owned or controlled
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`subsidiaries, or affiliates sold pork in interstate commerce, directly or through its wholly owned
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`or controlled affiliates, to purchasers in the United States, including in this District.
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`e.
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`Seaboard
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`29.
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`Seaboard Foods LLC is a limited-liability company headquartered in Shawnee
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`Mission, Kansas, and is a wholly owned subsidiary of Seaboard Corporation. During the
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`Conspiracy Period, Seaboard Foods LLC and/or its predecessors, wholly owned or controlled
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`subsidiaries, or affiliates sold pork in interstate commerce, directly or through its wholly owned
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`or controlled affiliates, to purchasers in the United States, including in this District.
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`30.
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`Seaboard Corporation is a Delaware corporation headquartered in Merriam,
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`Kansas, and is the parent company of Seaboard Foods LLC. During the Conspiracy Period,
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`Seaboard Corporation and/or its predecessors, wholly owned or controlled subsidiaries, or
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`affiliates sold pork in interstate commerce, directly or through its wholly owned or controlled
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`affiliates, to purchasers in the United States, including in this District.
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`31.
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`Seaboard Corporation and Seaboard Foods LLC are referred to here collectively as
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`“Seaboard.” Seaboard reports a wide variety of pork data to Agri Stats, including, without
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`limitation, highly detailed, confidential information regarding its production and sales of pork.
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`f.
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`Smithfield
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`32.
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`Smithfield Foods, Inc. is incorporated in the Commonwealth of Virginia, and an
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`indirect wholly owned subsidiary of WH Group Limited, a Chinese company. Smithfield Foods
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`is headquartered in Smithfield, Virginia, and reports a wide variety of pork data to Agri Stats,
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`including, without limitation, highly detailed, confidential information regarding its production
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`and sales of pork. During the Conspiracy Period, Smithfield Foods, Inc. and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or
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`through its wholly owned or controlled affiliates, to purchasers in the United States, including in
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`this District.
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`g.
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`Triumph
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`33.
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`Triumph Foods, LLC is a limited-liability company headquartered in St. Joseph,
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`Missouri, and reports a wide variety of pork data to Agri Stats, including, without limitation, highly
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`detailed, confidential information regarding its production and sales of pork. During the
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`Conspiracy Period, Triumph Foods, LLC and/or its predecessors, wholly owned or controlled
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`subsidiaries, or affiliates sold pork in interstate commerce, directly or through its wholly owned
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`or controlled affiliates, to purchasers in the United States, including in this District.
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`h.
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`Tyson
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`34.
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`Tyson Foods, Inc. is a publicly traded Delaware corporation headquartered in
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`Springdale, Arkansas. During the Conspiracy Period, Tyson Foods, Inc. and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or
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`8
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`through its wholly owned or controlled affiliates, to purchasers in the United States, including in
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`this District.
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`35.
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`Tyson Prepared Foods, Inc. is a Delaware corporation headquartered in Springdale,
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`Arkansas and is a wholly owned subsidiary of Tyson Foods, Inc. During the Conspiracy Period,
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`Tyson Prepared Foods, Inc. sold pork in interstate commerce, directly or through its wholly owned
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`or controlled affiliates, to purchasers in the United States, including in this District.
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`36.
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`Tyson Fresh Meats, Inc. is a Delaware corporation headquartered in Springdale,
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`Arkansas and is a wholly owned subsidiary of Tyson Foods, Inc. During the Conspiracy Period,
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`Tyson Fresh Meats, Inc. sold pork in interstate commerce, directly or through its wholly owned or
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`controlled affiliates, to purchasers in the United States, including in this District.
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`37.
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`Tyson Fresh Meats, Inc., Tyson Prepared Foods, Inc. and Tyson Foods, Inc. are
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`referred to here collectively as “Tyson.” Tyson reports a wide variety of pork data to Agri Stats,
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`including, without limitation, highly detailed, confidential information regarding its production
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`and sales of pork.
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`i.
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`Co-Conspirators
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`38.
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`Co-Conspirator
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`Indiana Packers Corporation
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`is an
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`Indiana corporation
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`headquartered in Delphi, Indiana, and reports a wide variety of pork data to Agri Stats, including,
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`without limitation, highly detailed, confidential information regarding its production and sales of
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`pork. During the Conspiracy Period, Indiana Packers Corporation and/or its predecessors, wholly
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`owned or controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or through
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`its wholly owned or controlled affiliates, to purchasers in the United States. Indiana Packers
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`Corporation’s parent companies are Itoham Foods, Inc., Mitsubishi Corporation, and Mitsubishi
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`Corporation (Americas).
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`39.
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`Various other persons, firms, and corporations not named as defendants have
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`performed acts and made statements in furtherance of the conspiracy. Defendants are jointly and
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`severally liable for the acts of their co-conspirators whether or not named as defendants in this
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`complaint. Throughout this Complaint, Indiana Packers and the other persons, firms, and
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`corporations not named as defendants that performed acts and made statements in furtherance of
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`the conspiracy are collectively referred to as “Co-Conspirators.”
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`IV.
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`FACTUAL ALLEGATIONS
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`40.
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`Starting in at least 2009 and continuing to the present, Defendants and their co-
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`conspirators conspired to fix, raise, maintain, and stabilize pork prices. To effectuate and ensure
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`the stability of their anticompetitive agreement, the Producer Defendants relied on a unique
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`industry data sharing service provided by Defendant Agri Stats, Inc. Agri Stats provided a means
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`for the Producer Defendants to obtain and monitor critical and competitively sensitive business
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`information regarding each other’s production metrics, thereby serving as a central and critical
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`part of Defendants’ price-fixing scheme, resulting in a stable and successful anticompetitive cartel.
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`41.
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`The Chicago Mercantile Exchange (“CME”), the U.S. Department of Agriculture
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`(“USDA”) and various other entities publicly publish aggregated daily, weekly, monthly, and
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`annual supply and pricing information concerning the U.S. pork industry, including: the CME
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`Lean Hog Index, which reflects prices paid for hogs in the U.S.; the CME Pork Cutout Index,
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`which reflects the prices paid for pork (a “cutout’ is the approximate value of a hog calculated
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`using the prices paid for wholesale cuts of pork); and USDA’s National Daily Hog and Pork
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`Summary. The pricing and production information in those reports and indices is completely
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`anonymous and aggregated (or averaged), and indeed the USDA reports clearly state that, for
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`certain prices are “not reported due to confidentiality.”
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`42.
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`But only Agri Stats receives from the Producer Defendants, and then provides to
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`the Producer Defendants, detailed information to accurately determine producer-specific
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`production, costs, and general efficiency. Agri Stats is a company that generates confidential pork
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`industry data considerably more detailed than any similar types of available reports, and the Agri
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`Stats reports include the following data categories:
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`(a)
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`Performance Summary;
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`(b)
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`Feed Mill;
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`(c)
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`Ingredient Purchasing;
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`(d) Weaned-Pig Production;
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`(e) Nursery;
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`(f)
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`Finishing;
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`(g) Wean-to-Finish;
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`(h) Market Haul; and
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`(i)
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`Financial information, including profits and sales.
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`43. Much of the information shared by Agri Stats and the Producer Defendants was
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`unnecessary to achieve any benefits for pork producers. Exchanging individual company data
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`(particularly current data on prices and costs) is not required to achieve major efficiencies. In fact,
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`in a truly competitive market, the participants would closely protect such proprietary information
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`from disclosure as providing it to competitors would be disadvantageous: unless, of course, there
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`is an agreement that the competitors will use the information to the joint benefit of each other as
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`was the situation in the pork industry.
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`44.
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`Agri Stats describes itself as a “benchmarking” service that “allows organizations
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`to develop plans on how to adopt best practice, usually with the aim of increasing some aspect of
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`performance.” But describing Agri Stats as a “benchmarking” service does not accurately reflect
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`11
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`its critical role in the pork industry and the fundamental importance Agri Stats has to the Producer
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`Defendants.
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`45.
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`Beginning in 2008, after two decades focusing primarily on the poultry industry,
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`Agri Stats began selling its so-called “benchmarking” services to pork producers, including the
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`Defendants. Pork producers were told by Agri Stats’ Greg Bilbrey that “benchmarking in the
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`swine industry could range from simple production comparisons to elaborate and sophisticated
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`total production and financial comparisons. Each and every commercial swine operation is
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`encouraged to participate in some benchmarking effort.”
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`46.
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`Agri Stats emphasized to pork producers that sharing information through
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`“benchmarking” could help achieve the “ultimate goal [of] increasing profitability – not always
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`increasing the level of production.” Agri Stats told the industry that each pig producer “should be
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`participating in some type of benchmarking. To gain maximum benefit, production, cost and
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`financial performance should all be part of the benchmarking program… . Producer groups could
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`design and operate their own benchmarking effort,” and, most importantly, “[e]ach participant has
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`to commit” to ensure the accuracy and reliability of the data collected and submitted to Agri Stats.
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`47.
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`Agri Stats collects data from the Producer Defendants, audits and verifies the data,
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`and ultimately reports back to, the Producer Defendants detailed statistics on nearly every
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`operating metric within the industry. Agri Stats’ survey methodology involves – from and to the
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`Producer Defendants – direct electronic data submissions of financial, production, hog placement,
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`size and weaning age, capacity, cost, and numerous other categories of information by each pork
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`producer on a weekly and monthly basis. At each of the Producer Defendants’ pork facilities,
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`certain employees, typically in the accounting department, are responsible for regularly submitting
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`the data to Agri Stats. Agri Stats uses a detailed audit process to verify the accuracy of data from
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`Case: 1:21-cv-06553 Document #: 1 Filed: 12/08/21 Page 16 of 55 PageID #:16
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`each producer, often directly contacting the Producer Defendants to verify data before issuing
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`reports to Agri Stats subscribers.
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`48.
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`Because of the nature of the life of a hog, even current and historical information
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`about hog production numbers effectively gives forward-looking supply information to
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`competitors. Because of the biological cycle for hogs, the time necessary to substantially increase
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`production can be as much as two years.
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`49.
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`Agri Stats’ critical importance for a collusive production-restriction scheme in the
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`pork market lies not only in the fact that it supplies data necessary to coordinate production
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`limitations and manipulate prices, but also in its market-stabilizing power. Price-fixing or output-
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`restricting cartels, regardless of industry, are subject to inherent instability in the absence of
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`policing mechanisms, as each individual member has the incentive to “cheat” other members of
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`the cartel – for example, by boosting pork production to capture higher prices even as other
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`cartelists heed their conspiratorial duty to limit production.
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`50.
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`Agri Stats’ detailed statistics – coupled with its regular, in-person meetings with
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`each Producer Defendant and routine participation in trade association events widely attended by
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`the Producer Defendants’ senior executives – serve an indispensable monitoring function, allowing
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`each member of Defendants’ cartel to police each other’s production figures (which are
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`trustworthy because they have been audited and verified by Agri Stats’ team) for any signs of
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`“cheating.”
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`A.
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`Agri Stats’ Detailed Reports Enable the Producer Defendants to Accurately
`Assess and Monitor their Competitors’ Production Levels
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`51.
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`Agri Stats claims to maintain the confidentiality and anonymity of individual
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`companies’ data by giving each company a report identifying only that company’s specific
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`facilities by name, but not identifying by name other producers’ facilities described in the report.
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`52.
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`However, contrary to these assertions, the Producer Defendants can (and do) readily
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`determine “whose numbers the numbers belong to.” Agri Stats reports are so detailed that any
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`reasonably informed producer can easily discern the identity of its competitors’ individual
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`facilities. It is common knowledge among producers that others can do so, with some of the
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`Producer Defendants referring to the task of determining the identity of individual competitor’s
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`data as “reverse engineering.”
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`53.
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`Indeed, each Producer Defendant knows that when it provides its internal,
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`confidential information to Agri Stats, the other producers will be able to access that information
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`and identify the Producer Defendant that submitted it. There is no legitimate purpose to provide
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`this specific, competitively sensitive information to Agri Stats, nor is there any legitimate purpose
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`for Agri Stats to disseminate the information in the detailed, readily decipherable form in which it
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`is sent to Defendants; rather, it is provided, compiled and transmitted for anti-competitive
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`purposes.
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`54.