McDonald’s is accusing JBS USA, Tyson Foods, Cargill, and National Beef of conspiring to artificially raise beef prices in the United States.
In a lawsuit reported by The Washington Post, the fast food giant alleges that since at least 2015, the companies have been conspiring to limit the supply of meat, which has raised food prices.
“The purpose of the conspiracy was to fix, raise, stabilize, and/or maintain the price of beef sold to [McDonald’s] and others at supra-competitive levels — that is, artificially higher prices than would have been beef prices without the conspiracy,” the lawsuit filed in a federal court in New York last Friday states.
In December, Target, BJ’s Wholesale Club, Gordon Food Service, and Glazier Foods also filed antitrust actions against the meatpackers — all represented by the same law firm that filed McDonald’s lawsuit.
Together, the four meatpackers control 82% of the beef market in the United States, and they have long been accused of violating the Sherman Antitrust Act.
The meat companies have also been sued by cattle ranchers and consumers in cases that have been ongoing in U.S. courts for years.
The Department of Justice reportedly requested information from the companies in 2020 as part of an antitrust investigation, as reported by Bloomberg that year.
The following year, around 30 lawmakers also requested that the DOJ investigate the rising beef prices. “Over the past few years, while the price of cattle in America has plummeted, the price of packaged beef has significantly risen, raising consumer prices at supermarkets. At the same time, major meat processors have made significant profits, while both U.S. beef consumers and independent cattle producers have paid the price,” the lawmakers wrote, according to the Post. “These significant price disparities are driving independent cattle producers into bankruptcy and causing consumers to pay an unnecessary, super-inflated premium for beef.”
The Post reported that in 2022, JBS reached a $52.5 million settlement in a lawsuit brought by beef buyers. However, in another case brought by farmers, a district judge dismissed the complaint last year.
In their complaint, McDonald’s claims that historically, the price per hundred pounds of cattle ranged between $20 and $40 less than the average wholesale price per hundred pounds of beef. But this correlation began to change drastically around 2015, according to the newspaper citing the lawsuit.
By 2021, the difference had increased to $156.50, and recent data from the Department of Agriculture shows that the spread from rural producer to wholesale remains the same.
According to McDonald’s, “by the end of 2021, the top two defendants, Tyson Foods and JBS USA, reported record margins or net revenues in their beef business.”
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Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
