Food & Agriculture Quarterly June 2020 - Page 19

FOOD & AGRICULTURE QUARTERLY | JUNE 2020 Antitrust litigation update in the food and agriculture industries ALLEN CARTER As we have noted in previous editions, many food and agriculture businesses have found themselves as the target of antitrust litigation and investigations in recent years. The COVID-19 pandemic has not slowed that trend. In fact, as the pandemic reverberates through the economy, the trend may be accelerating. Consumers and politicians alike took notice of changing prices at the supermarkets, and calls for investigations made their way to the United States Department of Justice. Moreover, previously-filed cases remain hotly contested. The news is not all dire, however— there have been victories. The United States antitrust laws prohibit competitors from collaborating in ways that restrict competition. The Capper-Volstead Act (the “Act”) provides agricultural producers—farmers, ranchers, dairymen, and the like—with an exemption from those laws, so long as they follow the provisions of the Act to the letter. Therein lies the rub. Recent litigation has demonstrated that it is exceedingly difficult to adhere to the exemptions’ administrative requirements and to prove compliance in a court of law, leaving the cooperatives’ farmer-members exposed to antitrust liability even though their collective actions may have been protected had the cooperatives maintained rigid compliance to the Act. The result: numerous agricultural producers have been embroiled in years of costly antitrust litigation. Here, we will examine developments in food and agricultural antitrust litigation and update previous reports of certain cases. Beef: Calls for Antitrust Investigations into Meat Packers. Rising prices during the COVID-19 pandemic shined the national spotlight on pricing in the beef industry. This time, processors, not producers, have received the scrutiny. The recent controversy started on March 19, 2020, when four Senators sent a letter to Attorney General William Barr and Assistant Attorney General for the Antitrust Division Makan Delrahim to “urge the Department of Justice to investigate continued allegations of meat packer price fixing within the cattle market.” The Senators lamented the widening gap between the prices for live cattle and the shelf price of meat, raising concerns that the gap might be the result PAGE 19