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McDonald's, the fast-food giant, has filed a federal lawsuit against several major meat companies, including Tyson, JBS, Cargill, and National Beef Packing Company, alleging they colluded to inflate beef prices. The lawsuit, filed on Friday, accuses the companies of engaging in anticompetitive measures, such as collectively limiting supply to raise prices and charging "illegally inflated" amounts.
According to the lawsuit, the alleged collusion transformed the beef market into "a monopoly in which direct purchasers were forced to buy at prices dictated by [the meat packers]." McDonald's claims that the meat packers began colluding as early as January 2015 and that the practice is ongoing. The suit argues that the meat companies violated a federal antitrust law known as the Sherman Act.
Fox Business reports that these companies have previously faced federal probes and allegations of price fixing. In 2022, JBS agreed to a $52.5 million settlement in a similar beef price-fixing lawsuit, and Tyson agreed to pay $221.5 million in 2021 over class-action claims that the company intentionally inflated the price of chicken. These settlements did not include admissions of wrongdoing.
The meat processors have previously argued that larger supply and demand factors that are out of their control caused prices to increase. For example, meat processing plants were sometimes closed during the height of the COVID-19 pandemic, and the industry has also faced labor shortages that were worsened during the pandemic.
However, McDonald's lawsuit cites increased profit margins during the alleged time of collusion and argues that the overall concentration of the market helps facilitate collusion. The lawsuit states that "conspiracies are easier to organize and sustain when only a few firms control a large share of the market." Data from recent years has shown that Tyson, JBS, Cargill, and National Beef control more than 80% of the U.S. beef market combined.
McDonald's is seeking a trial by jury. The outcome of this case could have significant implications for the meat industry and other large-scale buyers of beef.