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Action against JBS, Cargill, Tyson and National Beef alleges price inflation to consumers

12 June 2020

The four largest beef packers in the US – National Beef, JBS USA, Tyson and Cargill – are at the centre of a class action lawsuit filed by Central Grocers that alleges cattle market manipulation.

According to reporting in Beef Magazine, both the Department of Justice and USDA have recently investigated whether meat companies unlawfully fixed domestic beef prices. Although the Justice Department has not publicly confirmed its investigation, news sources told the magazine that the DOJ Antitrust Division sent a civil investigative demand to each of the defendants, seeking information about price fixing.

“While these investigations apparently were triggered most immediately by a spike in beef prices since the COVID-19 outbreak in the US, this spike is only one manifestation of defendants’ conspiracy,” the court document stated.

The lawsuit, filed in the District Court of Minnesota, alleges that the companies conspired to constrain beef supplies since early 2015. The four companies control approximately 80 percent of the fresh and frozen beef supplied to the US market – more than 25 million pounds.

“The existence of a conspiracy among the defendants was confirmed by at least one account by a confidential witness ('Witness One'),” the court document noted. "Witness One, who was previously employed by one of the defendants, has confirmed that each of the defendants expressly agreed to reduce its cattle purchase and slaughter volumes with the purpose and effect of increasing their margins. Transactional data and slaughter volume records reported by defendants, information published by the US Department of Agriculture and defendants’ public calls for industry-wide slaughter and capacity reductions corroborate Witness One’s account."

The lawsuit claims that the beef companies, “engaged in tactics – including purchasing fewer cattle than a competitive market would otherwise demand and running their processing plants at less than available capacity,” to create surpluses in the cattle market and subsequent shortages in the wholesale beef market. These moves drove down prices the companies paid for cattle, while simultaneously inflating the prices they could demand for finished beef.

Read the full story in Beef Magazine.



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