The Justice Department disclosed yesterday it has forced California producers to withdraw from an international raisin cartel suspected of trying to control the cost of raisins in the same way that oil prices are set by the Organization of Petroleum Exporting Countries.
Raison d'etre for yesterday's action was a two-year investigation by the Justice Department's Antitrust Division of possible price-fixing by the Raisin Administrative Committee.
The investigation is being ended as the result of an agreement between the Justice Department and the Department of Agriculture that prohibits the raisin-raisers and other federally chartered farm groups from participating in any international commodity cartels.
The Raisin Administrative Committee is one of 40 farm crop organizations set up by the Agriculture Department to oversee the marketing of everything from milk to muskmelons.
Although some of the agricultural marketing organizations have the authority to set prices, the raisin group's powers are limited to balancing supply and demand for the dried grapes by determining how many raisins will be sold to U.S. supermarkets, how many will be exported and how many will be stockpiled for future consumption.
The agricultural marketing groups are generally exempt from antitrust laws that prohibit price fixing, but can be prosecuted for activities that exceed their congressional mandate.
Under pressure from John Shenefield, head of the Justice Department's Antitrust Division, Agriculture Secretary Bob Bergland agreed to warn all the farm marketing groups that they face antitrust prosecution if they do anything that "unreasonably restrains U.S. domestic or foreign commerce."
The Agriculture secretary specfically told the raisin committee members they could be prosecuted if they "participate either directly or indirectly . . . in any bilateral or international undertaking or agreement with any competing foreign producer or seller or with any foreign government" in any raisin price-fixing scheme.
The Justice Department said it is taking no legal action against the raisin producers, but with the cooperation of the Agriculture Department will prohibit the group from attending this year's meeting of the International Sultana Conference. Sultanas are the kind of raisins eaten by most people outside the United States, and the Sultana Conference is the raisin; equivalent of OPEC, a cartel of producing nations.
The Justice Department stopped short of accusing the Sultana Conference of rigging prices, but said it has taken steps to ensure that U.S. raisin makers "will avoid any involvement in any collusive pricing and distribution arrangements with foreign producer groups."
Under the agreement with the USDA, government employes rather than Raisin Administrative Committee members will represent the United States at the next Sultana Conference. If the USDA officials and the Justice Department decide the conference is not trying to raise raisin prices, the raisin raisers may be permitted to attend subsequent Sultana sessions.
The Agriculture Department said it plans to issue new regulations for the raisin group that will prohibit it specifically from trying to rig prices.
Violation of the antitrust laws prohibiting price fixing can result in a penalty of three times the amount of any illegal price increase.