Fast food giant McDonalds are suing four titans of the meat processing market, alleging that they ‘conspired to limit supply’ in an attempt to boost profits.
Reuters reported that McDonalds have filed the case against Cargill, JBS S.A, JBS USA, Swift Beef Company, JBS Packerland Inc., National Beef Packing Company, Tyson Foods Inc. and Tyson Fresh Meats Inc.
In their filing they allege that 'the goal of their conspiracy was to fix, raise, stabilise and/or maintain the price of beef sold' – thereby improving their own profits after allegedly creating a demand for beef.
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In its legal documents, McDonald’s alleges that the meat processing companies successfully engaged in price-fixing through various tactics. The company argues that these processors and packers conspired to coordinate and manipulate prices by agreeing to pay less than competitive rates for slaughter-ready cattle, which is the primary input for beef production.
The lawsuit defines 'beef' as including boxed and ready-to-cook meat from companies like Cargill, JBS, and Tyson, as well as smaller producers. This includes cuts of beef, trimmings, processed products, offal, and by-products. Ground beef is also included if it comes from fed cattle, which are steers and heifers raised on special diets for beef production.
McDonald’s claims the defendants reduced the supply of slaughter-ready cattle and beef, which led to artificially high prices for the meat they sold.
The companies named in the lawsuit are some of the largest meat processors in the world. In 2018, Tyson Fresh, CMS, Swift/Packerland, and National Beef supplied about 80% of the fresh and frozen beef in the U.S.
Together, they controlled 81-85% of the market for ready-to-process fed cattle, while the next largest meatpacker had only a 2-3% market share.
McDonald’s is seeking a jury trial for this case.
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