Meat-packing giant JBS announced Feb. 1 that it has agreed to pay $52.5 million as a settlement against claims of beef price fixing.
This is the first settlement in a wave of nationwide antitrust litigation against the “big four” U.S. meat packers – Tyson Foods Inc., JBS SA, Cargill Inc. and National Beef Inc., who together control more than 80% of U.S. beef packing capacity.
This specific lawsuit was filed by grocery stores and wholesalers who accused the big four of working together since 2015 to suppress U.S. beef supplies in order to drive up the price of beef, creating a supply shortfall smaller companies could not make up.
Reuters reports that lawyers for the plaintiffs called the accord an “icebreaker” and an excellent recovery, citing JBS’ $24.5 million settlement in 2020 of price-fixing claims by pork purchasers.
In a statement to the press, JBS did not admit liability but said settling was in its best interest. It also said it will defend against beef price-fixing claims by other plaintiffs. Other existing lawsuits include allegations from cattle producers of manipulating beef prices, leading to producers getting paid much less than they would have in a competitive market.
Similar lawsuits and settlements have been played out in the JBS’ pork and poultry processing segments, leading to skepticism on the effectiveness of these litigation efforts in the long run. According to Farm Action, JBS’ U.S.-based beef operations delivered a gross profit of more than $1.7 billion in the third quarter of 2021. Considering that, paying a settlement of $52.5 million is indeed in the company’s best interest.
Meanwhile, no news has come from the antitrust investigation launched by the USDA and the Department of Justice (DOJ) in 2020, which is concerning to cattle producers and industry organizations.
“America’s cattle producers expect and deserve full transparency on any, and all, information related to the ongoing market investigations,” National Cattlemen’s Beef Association CEO Colin Woodall said in a statement. “It is clear from this settlement that cattle producers still don’t have all the information they have demanded and is deserved. The DOJ has an obligation to finish their investigation. Cattle producers do not have years to wait for the government to determine whether there has been wrongdoing; we demand answers now.”
The American Farm Bureau Federation (AFBF) sent a letter to the U.S. attorney general requesting a written update on the investigation within 90 days.
