Big Beef has a history of breaking the law if it means making more money for its shareholders and company executives. When just four companies — National Beef Packing Company, Cargill, JBS, and Tyson — collectively control 80% of the U.S.beef market, it’s relatively easy to collude and manipulate prices.
And should Big Beef get caught with its hooves in the cookie jar, the playbook says admit to nothing and try to negotiate with plaintiffs and the courts for a quick settlement. Just make the lawsuits go away.
You don’t have to go back very far in time to find examples.
Two years ago, JBS agreed to pony up $52.5 million dollars in a 2020 cattle market manipulation class action lawsuit that also roped in Tyson, NBPC and Cargill:
“Since at least the start of 2015, Defendants have exploited their market power in this highly concentrated market by conspiring to limit the supply of, and to fix the prices of, beef sold to Central Grocers and others in the U.S. wholesale market (the ‘Conspiracy’). The principal, but not exclusive, means Defendants have used to effectuate their Conspiracy is a concerted scheme to artificially constrain the supply of beef entering the domestic supply chain. Defendants’ collusive restriction of the beef supply has had the intended effect of artificially inflating beef prices. As a result, Central Grocers and other Class members paid higher prices than they would have paid in a competitive market.”
Sysco Corporation — the nation’s largest food distributor — has filed a similar lawsuit claiming Big Beef coordinated efforts to limit the number of cattle slaughtered in order to boost profits.
Big Meat price fixing lawsuits also dot the landscape in the pork and chicken processing businesses.
And now the Golden Arches have joined the fray. McDonald’s — the nation’s largest fast food burger company — says Big Beef has been ripping the company off for almost a decade in violation of the federal Sherman Antitrust Act:
“Beginning at a time yet to be determined but at least as early as 2015 and continuing in force and effect, or both, thereafter, Defendants and their co-conspirators entered and engaged in a continuing agreement, understanding, and conspiracy in unreasonable restraint of trade to artificially fix, raise, increase, and/or stabilize the wholesale price for beef sold to Plaintiff, through its assignors, in the United States at artificially elevated levels, in unreasonable restraint of trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.”
McDonald’s wants a big splashy jury trial. The company claims it has witnesses with firsthand knowledge of the scheme. That’s the last thing Big Beef wants to see. But it may be just the ticket to get Congress to get off its collective backsides and put real pressure on the White House to bring criminal charges against Big Meat executives who conspire to price fix.
The Department of Justice and the Federal Trade Commission need to jointly study and release a report evaluating the current competitiveness of Big Beef and whether antitrust enforcers should attempt to break up the industry. Any future mergers making the Big Meat industry less competitive should be blocked pending the aforementioned DOJ/FTC study.
For far too long Big Meat in general and Big Beef in particular have been handled with kid gloves by the feds, receiving what amounts to slap-on-the wrist fines. It’s time — beyond time — to get serious with Big Beef’s unethical and illegal conduct. The question is do the feds have the political will?
