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Fast food giant McDonald’s has filed a lawsuit against several major meatpacking companies, alleging that they conspired to artificially inflate the price of beef. The lawsuit, filed accuses the four meatpackers of engaging in anti-competitive practices that have resulted in substantial damages to McDonald’s and its franchisees.
McDonald’s is essentially saying that Tyson and three other meat suppliers have colluded to maximize their profits while having chains like, McDonald’s pay their inflated prices for the meat used in the chain’s burgers.
According to the complaint filed in federal court in New York, the meatpacking companies, which include Cargill, JBS, National Beef and Tyson Foods were named as defendants, coordinated their actions to limit beef production, reduce supplies, and drive up prices. This alleged collusion, the lawsuit claims, allowed the meatpackers to reap excessive profits at the expense of consumers, including McDonald’s and its customers.
McDonald’s argues that the inflated beef prices have significantly impacted its business operations and profitability. The company asserts that it has been forced to absorb some of the increased costs, while also passing on portions of the price hikes to consumers. This, in turn, has negatively affected McDonald’s sales and market competitiveness.
The lawsuit stated that the meatpackers: “engaged in a contract, combination or conspiracy in restraint of trade or commerce” in violation of antitrust law, with a goal to sell at prices “artificially higher than beef prices would have been in the absence of their conspiracy.”
The lawsuit seeks damages, injunctive relief, and other appropriate remedies to address the alleged price-fixing scheme. If successful, the case could have far-reaching implications for the meatpacking industry and the broader food supply chain.
McDonald’s continued in the lawsuit: “Only colluding meatpackers would expect to benefit by reducing their prices and purchases of slaughtered cattle, fully aware that their conspiracy would shield them from the pressures of a competitive market.”
This lawsuit follows similar cases filed by cattle ranchers and consumers against large meatpacking companies. Tyson Foods (listed on the New York Stock Exchange) has acknowledged receiving inquiries from the US Department of Justice’s antitrust division regarding the cattle and beef markets (2020-2021). US authorities have also investigated price-fixing allegations in the poultry industry. In 2021, Pilgrim’s Pride (owned by JBS of Brazil) pleaded guilty to a broiler chicken price-fixing conspiracy and was fined $107 million.
