Case against tomato company is harbinger of feds' new focus on illegal practices in agriculture, food

A possible tomato monopoly is the latest target in the federal government's increased scrutiny of the food sector. Federal prosecutors in Sacramento allege that SK Foods of Monterey, Calif., used more than $330,000 in bribes from 1998 to 2008 to subvert competition and nail down deals to sell the company's tomato paste, peppers and other products, P.J. Huffstutter of the Los Angeles Times reports. The investigation comes on the heels of federal looks into dairy distributors, egg producers, citrus firms and seed developers.

"Behind the push are growing concerns that, as the industry becomes increasingly consolidated, the public's grocery bills are getting bigger in part from corrupt or monopolistic practices among food processors, distributors or farmers," Huffstutter writes. Next month the Justice Department and the Department of Agriculture will hold meetings about lack of competition in the dairy, grain, livestock and poultry sectors. Christine Varney, who leads the administration's antitrust team, promised during her confirmation hearings that agriculture would be a focus.

"Nearly 95 percent of all tomatoes grown in the U.S. are processed by four companies in California," Huffstutter reports. Justice Department investigators say what they uncovered at SK Foods during a 20007 investigation of the California tomato industry was "a scheme designed to trick food makers into buying a lesser-quality tomato paste (which had been mislabeled to appear of a higher grade) and then shut out rivals on deals with big processors and supermarket chains," Huffsutter writes. (Read more)