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Justice Department Investigating U.S. Meatpacker Internet Alliance.

The Justice Department is investigating whether a business-to-business (B2B) Website being designed by six meatpacking companies violates federal anti-trust law. Ten Minnesota lawmakers earlier asked the department's antitrust division to look into the joint venture that would create an online marketplace for meat and poultry products, service and information. The alliance includes Cargill's red meat division, Excel Corp.; IBP; Smithfield Foods; Tyson Foods; Gold Kist Inc.; and Farmland Industries. In April, the six meat processors said they would pool $20 million to set up an independent company that would be open to buyers and sellers of meat and poultry products. The exchange, they said, would allow faster and direct comparison of products and negotiation of prices.

Assistant U.S. Attorney Joel Klein said the agency is aware of this new venture and is taking steps to determine if its formation or operation is likely to have anti-competitive effects on producers and consumers. "You can be assured that if we conclude that the venture violates the anti-trust laws, we will take appropriate action," Klein wrote in a letter to state officials.

Reaction from U.S. meatpackers has been measured. Tyson spokesman Ed Nicholson said there would be "no collusion with regard to fixing prices," according to Associated Press. Mark Klein, communication manager for Excel, said, "We will cooperate with any review." IBP spokesman Gary Mikelson said investigators are likely to be disappointed by what they will find. "What they will learn is that it is designed as an independent company.... If anything, we believe competition will be enhanced," he said.
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Comment:Justice Department Investigating U.S. Meatpacker Internet Alliance.
Publication:Food & Drink Weekly
Geographic Code:1USA
Date:Jun 26, 2000
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