McDonald’s has filed a federal complaint in New York against the U.S. meat industry’s top companies, including Tyson, JBS, Cargill and National Beef Packing Company, accusing them of colluding to inflate beef prices.
The lawsuit outlines the companies’ alleged anticompetitive practices, such as collectively limiting supply to artificially boost prices and charge higher amounts for beef.
The big picture: McDonald’s alleges that the meat packers’ collusion dates back to at least 2015 and continues to the present, violating the Sherman Act, a federal antitrust law designed to prevent monopolistic behaviors.
- The lawsuit contends that the collusion resulted in a monopoly where direct purchasers were compelled to buy beef at prices dictated by the meat packers.
Flashback: The accused meat packers, including Tyson, JBS, Cargill, and National Beef, have faced federal probes and previous allegations of price fixing, leading to numerous lawsuits from various entities in the past.
- Previous settlements, such as JBS’s $52.5 million settlement in 2022 and Tyson’s $221.5 million settlement in 2021 for similar allegations, did not include admissions of wrongdoing.
Driving the news: Meat processors have historically attributed price increases to factors such as fluctuations in supply and demand, as well as unforeseen events like plant closures during the COVID-19 pandemic and labor shortages exacerbated by the pandemic.
- The industry’s defense also points to larger market concentration and the resulting profit margins during the alleged conspiracy period, highlighting the ease of organizing and sustaining conspiracies in a market with only a few dominant firms.
What we’re watching: McDonald’s is seeking a trial by jury to address its claims against the meat packers, pointing out the significant control these companies have over the U.S. beef market, with over 80% combined control by Tyson, JBS, Cargill, and National Beef.
