American wheat farmers file lawsuit against AWB Ltd.

by FoodBusinessNews.net Staff
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WASHINGTON — U.S. wheat farmers on Monday filed a class-action lawsuit in federal district court in New York City against AWB Ltd., the private entity in charge of exporting Australian wheat to foreign markets, and its U.S. subsidiary, AWB (U.S.A.) Ltd.

The action follows a civil lawsuit lodged late last summer against the AWB by a group of North American wheat farmers.

From 1999 until 2003, the AWB allegedly paid bribes and kickbacks to the Saddam Hussein regime in exchange for exclusive contracts for wheat sales under the United Nations’ Oil for Food Program and to keep its competition out of the Iraqi market. As a result, American farmers allege they were stuck with an oversupply of wheat during that period which depressed the prices at which they could sell their wheat.

The lawsuit filed Monday focuses on farmers who produced hard red winter wheat during the relevant period. American wheat farmers are looking for compensation for the damages they suffered, estimates of which could be more than $100 million.

According to Benjamin Brown, a partner at Cohen, Milstein, Hausfeld & Toll, P.L.L.C., who is representing the plaintiff farmers, "Wheat is a commodity market where price effects are globally-related. AWB knew that, by paying these bribes, it would profit at the direct expense of American farmers — its only real competition in the Iraqi market. Unfortunately, AWB achieved its monopoly in the Iraqi market not through fair competition, but by deceiving the United Nations into unwittingly funding Hussein’s corrupt regime. There has been a great deal of talk on Capitol Hill, and in the wheat farming community, about the damage inflicted on U.S. farmers by AWB’s conduct. Today’s filing is the first concrete step toward recovery."

The Washington law firm of Cohen, Milstein, Hausfeld & Toll is joined in the lawsuit by The Law Firm of L. Palmer Foret, P.C.; Edmond & Jones, L.L.P.; Furth Lehman & Grant, L.L.P.; Pearson, Simon, Warshaw, Penny, L.L.P.; and Fine Kaplan & Black L.P.C.

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