Dive Brief:
- McDonald’s is suing four of the world’s largest meat producers, including Tyson, JBS, Cargill and National Beef Packing, for allegedly conspiring to inflate the price of beef.
- The lawsuit, filed Friday in a New York federal court, alleges that the producers violated U.S. antitrust law by coordinating lower prices for slaughter-ready cattle and slowing plant production, which artificially raised prices for McDonald’s and other buyers.
- McDonald’s, the world’s largest buyer of beef and pork, is seeking an undisclosed amount in monetary restitution. Meat companies named in the suit did not immediately respond to requests for comment, but have previously admitted no wrongdoing in similar cases.
Dive Insight:
Over the years, industry stakeholders have raised concerns about the large disparity between fed cattle and wholesale beef prices, resulting in separate investigations by the U.S. Department of Agriculture and the U.S. Justice Department.
The agencies sought to find out if the “Big Four” meatpackers, which control about 80% of U.S. beef production, violated federal antitrust laws and principles of fair competition in any way. Investigations are ongoing.
The McDonald’s lawsuit is the latest to accuse JBS, Tyson, Cargill and National Beef of conspiring to drive up beef prices by restricting supplies since 2015. A Minnesota court last year threw out a similar challenge from a group of ranchers, saying it lacked legal standing.
In some cases, producers have chosen to settle. In 2022, JBS USA agreed to pay $52.5 million to settle price-fixing allegations from grocery stores and wholesalers.
According to the 100-page complaint from McDonald’s, the companies held frequent meetings at conferences and trade shows, where executives and key employees likely exchanged sensitive information that ensured a stranglehold on beef and cattle pricing to bolster profits.
“By collusively underpaying suppliers for fed cattle, and over time reducing beef output, Defendants have been able to increase their margins and profits, confident that none of them would take volume from each other,” McDonald’s said in the lawsuit.
The fast food giant did not immediately respond to a request for comment.