McDonald's Sues Top Meat Packers Alleging Price-Fixing
McDonald’s joined a chorus of litigants charging Tyson Foods, JBS, Cargill and National Beef with colluding to limit beef supplies and thereby boost prices, in violation of the Sherman Act.
McDonald’s said in its own lawsuit, filed last Friday (Oct. 4) in United States District Court for the Eastern District of New York (Brooklyn), the four companies (including named subsidiaries) collectively have been reducing their output to drive up industry prices since 2015.
The meat producers have denied any wrongdoing in related cases that have been consolidated in Minnesota federal court, according to Reuters. The plaintiffs in those cases include BJ’s Wholesale, Sodexo, Target and Aldi. They also face lawsuits from U.S. consumers, cattle producers and others that are seeking class-action status and monetary damages in the Minnesota litigation.
The McDonald’s suit claims “they implemented their conspiracy by coordinating, manipulating, or agreeing to pay less than competitive prices for the main or primary input in producing beef, namely, slaughter-ready cattle.”
Together, they've cornered the market. The suit notes, “In 2018, Defendants … [collectively] sold approximately 80% of the more than 25 million pounds of fresh and frozen beef supplied to the U.S. market. … The next largest, non-Defendant meatpacker had only a 2-3% market share.”
It acknowledges, “The U.S. Department of Justice and U.S. Department of Agriculture have launched investigations into whether Defendants fixed beef prices in the United States” since January of 2015.
Ultimately, the suit asks for “three times the damages sustained by Plaintiff,” although in our reading of the filed lawsuit, that amount was not specified.
Reuters noted JBS said in 2022 it would pay $52.5 million to resolve some of the purchasers' class action claims.
