McDonald’s sues meatpackers for alleged price-fixing
Company claims defendants colluded to suppress supply in order to increase beef prices.
By Krissa Welshans
McDonald’s filed Oct. 4 a lawsuit in the U.S. District Court of the Eastern District of New York against meatpackers Cargill, JBS, Swift Beef Company, National Beef Packing Company and Tyson Foods alleging they conspired to fix prices by limiting beef supplies.
According to the filing, McDonald’s alleges that at least as early as 2015, and continuing through the present, the companies “engaged in a contract, combination or conspiracy in restraint of trade or commerce” in violation of the Sherman Act.
The goal of their “conspiracy,” which the lawsuit states was “effective and achieved,” was to fix, raise, stabilize and/or maintain the price of beef sold.
McDonald’s alleges the leading meatpackers have “exploited their pivotal role” in the process of buying cattle “to produce beef to collusively control upstream cattle pricing and downstream beef pricing” during the time period laid out in the lawsuit.
In the filing, a witness who was a former employee of Swift reports having multiple discussions with a plant head of fabrication about the meatpackers having an “agreement” to reduce their purchase and slaughter volumes in response to what they perceived to be high cattle prices. As stated in the filing, data from that period corroborates this account.
McDonald’s lawsuit further outlines investigations and actions taken by the government to explore the structure of the beef sector and market manipulation.
McDonald’s is seeking three times the damages sustained as a result of the antitrust violations as well as reimbursement for any costs of the lawsuit, including attorneys’ fees. It has also asked the court to permanently stop the “conspiracy” between the defendants.
