McDonald’s has filed a lawsuit against the U.S. meat industry’s major beef processors and their subsidiaries for alleged price fixing. The fast-food giant filed Oct. 4 in a New York federal court, alleging that Cargill, JBS, Tyson Foods, National Beef Packing and other packers took anticompetitive measures, including lowering their collective output and, therefore, driving up beef prices, dating as far back as 2015.
“Only colluding meatpackers would expect to benefit by reducing their prices and purchases of slaughtered cattle because they would know that their conspiracy would shield them from the dynamics of a competitive marketplace. By collusively underpaying suppliers for fed cattle, and over time reducing beef output, [the] defendants have been able to increase their margins and profits, confident that none of them would take volume from each other,” McDonald’s stated in the lawsuit. Figure 1 shows the fluctuation of output from the major packers versus independent packers over what is termed the “conspiracy period” in the lawsuit.
This antitrust lawsuit is the latest of many aimed at the top beef packers. Tyson, Cargill, JBS and National Beef have been under scrutiny for the past few years, facing federal probes into allegations of price fixing and receiving several lawsuits from various groups and companies including BJ’s Wholesale, Sodexo, Target and Aldi. The packers have so far denied any wrongdoings in the related lawsuits, which have been consolidated in a Minnesota federal court.
However, while some litigation is ongoing, a few of the companies have paid out settlement money in a few cases.
In 2022, JBS agreed to pay a $52.5 million settlement in a beef price-fixing lawsuit, and Tyson paid $221.5 million back in 2021 after facing class action claims of purposely inflated chicken prices.
In March of 2024, JBS agreed to pay $55 million and Tyson Foods agreed to pay $72.25 million to settle a wage-fixing lawsuit from a group of current and former employees.
None of the settlement agreements constitute an admission of wrongdoing by either company. While none of the packing companies have responded to media regarding the newest lawsuit, they have previously pointed to larger factors such as labor shortages, plant closures during the COVID-19 pandemic, and other supply and demand issues as the root causes of increased prices.
