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McDonald’s Sues Big 4 Meat Packers for Price Fixing

Reuters’ Mike Scarcella reported Monday that “McDonald’s has sued JBS, Tyson Foods and other leading meat processing and packing companies for allegedly conspiring for years to limit beef supplies, boosting their profits while causing the fast food giant to pay artificially higher prices.

“McDonald’s said in a lawsuit filed on Friday in Brooklyn federal court that the meatpackers, also including Cargill and National Beef Packing, collectively reduced their output to drive up industry prices since 2015,” Scarcella reported. “The lawsuit is the latest to accuse the world’s largest meatpackers of violating U.S. antitrust law by coordinating on the price they paid for cattle and on slaughter volumes.”

“‘Only colluding meatpackers would expect to benefit by reducing their prices and purchases of slaughtered cattle because they would know that their conspiracy would shield them from the dynamics of a competitive marketplace,’ McDonald’s said in its lawsuit,” Scarcella reported. “JBS, Tyson, Cargill and National Beef did not immediately respond to requests for comment on the lawsuit on Monday. McDonald’s had no immediate comment.”

McDonald’s in Saugus, Massachusetts. Courtesy WikiMedia Commons.

Bloomberg Law’s Quinn Wilson reported that “McDonald’s wants a declaratory judgment affirming the conspiracy’s existence, damage awards three times the amount the damages it sustained, and pre-judgment and post-judgment interest, according to the complaint. They also ask the district court to enter a permanent injunction to indefinitely enjoin the defendants from continuing their conduct.”

McDonald’s Lawsuit Adds to Growing List Against Meatpackers

While none of the meat producers have so far commented on the McDonald’s lawsuit, they “have denied any wrongdoing in related cases that have been consolidated in Minnesota federal court,” Scarcella reported. “The plaintiffs in those cases include BJ’s Wholesale, Sodexo, Target and Aldi.”

The Financial Times’ Gregory Meyer reported that the McDonald’s “lawsuit follows proposed class-action cases filed by cattle ranchers and beef customers against large packing companies. New York-listed Tyson has disclosed receiving requests for information on the cattle and beef packing markets in 2020 and 2021 from the US Department of Justice’s antitrust division.”

“Federal antitrust authorities have also investigated price-rigging allegations in the poultry market,” Meyer reported. “In 2021, Pilgrim’s Pride, which is majority owned by Brazil-based JBS, pleaded guilty and was ordered to pay $107mn in fines over a conspiracy to fix prices for broiler chickens.”

The Washington Post’s Tim Carman reported that “in 2020, the Justice Department reportedly sent subpoenas to the four meatpackers in an antitrust probe. A year later, nearly 30 members of Congress sent the Justice Department a letter, suggesting it was time for government ‘to determine whether the stranglehold large meatpackers have over the beef processing market violate our antitrust laws and principles of fair competition.'”

“‘In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store. Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price,’ the lawmakers wrote,” according to Carman’s reporting. “‘These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.'”

Ryan Hanrahan is the Farm Policy News editor and social media director for the farmdoc project. He has previously worked in local news, primarily as an agriculture journalist in the American West. He is a graduate of the University of Missouri (B.S. Science & Agricultural Journalism). He can be reached at rrh@illinois.edu.

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