FOOD & AGRICULTURE QUARTERLY | JUNE 2020
Antitrust litigation update
in the food and agriculture
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