McDonald’s sues meat industry giants over alleged beef price fixing scheme

article

Close-up of McDonald's Double Quarter Pounder with Cheese burger, San Ramon, California, August 3, 2024. (Photo by Smith Collection/Gado/Getty Images)

NEW YORK - McDonald’s has filed a lawsuit against some of the country's largest meat packers.

The fast-food hamburger chain has filed a complaint against the meat industry's "Big Four" — Tyson, JBS, Cargill and National Beef Packing Company — and their subsidiaries, alleging a price fixing scheme for beef specifically.

The suit was filed Friday in New York in which McDonald's accused the companies of anticompetitive measures such as collectively limiting supply to boost prices and charge "illegally inflated" amounts.

According to the complaint, the collusion caused the beef market to become "a monopoly in which direct purchasers were forced to buy at prices dictated by (the meat packers)," McDonald's suit reads — later noting that the injury it has sustained as one of those buyers is what "antitrust laws were designed to prevent."

Boy wins free McDonald's French fries for a year

A nine-year-old from Ohio earned himself free fries for a year at a local McDonald’s restaurant thanks to a custom-made costume.

McDonald's alleges that the meat packers' conspiracy dates back nearly a decade, at least as early as January 2015, and continues today. Its suit argues these companies' actions violate the Sherman Act, a federal antitrust law.

Tyson, JBS, Cargill and National Beef did not immediately respond to requests for comment Tuesday. But these companies have faced federal probes and allegations of price fixing before.

Lawsuits filed by grocery stores, ranchers, restaurants and wholesalers have piled up over the years. Some litigation is still pending, although meat packers and processers have opened their wallets in the past.

Such settlements did not include admissions of wrongdoing, however. Meat processors have previously maintained that larger supply and demand factors out of their control, not anticompetitive behavior, has caused prices to go up. Meat processing plants were occasionally closed during the height of the COVID-19 pandemic, for example, and the industry has also faced labor shortages that were worsened by the pandemic.

Still, lawsuits like the one from McDonald's point to increased profit margins during the alleged time of conspiracy — and argue that overall concentration of the market helps facilitate collusion.

"Conspiracies are easier to organize and sustain when only a few firms control a large share of the market," McDonald's suit reads. Data from recent years has showed that Tyson, JBS, Cargill and National Beef control more than 80% of the U.S. beef market combined, the suit notes.

McDonald's is seeking a trial by jury. The Chicago-based chain, which did not immediately respond to a request for further comment Tuesday, has more than 39,000 locations across over 100 countries worldwide, including about 13,000 in the U.S. The vast majority are franchised.