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The Big Meat Dilemma: Part 5 – Price Fixing and Pandemic Profiteering

If economics class taught us anything, it’s that when supply increases, retail prices should decrease. An epic 121 page complaint brought forth by a group of Midwestern feedlot operators alleges that shortly after meat prices reached a record high in 2015 and through present day, The Big 4 have employed a variety of orchestrated methods to artificially suppress beef supply while enjoying the financial gains of strong demand.

The suit further alleges, “the Big Four imported large volumes of foreign cattle, especially from Canada and Mexico, to artificially block market access to ranchers here. Thanks to an overlooked USDA loophole and the repeal of country of origin labeling laws, commonly known as COOL, much foreign beef can still be labeled “product of USA.” 

The country’s largest food distributor, Sysco, joined in on the litigation against The Big 4 in July 2022, filing a federal lawsuit in Texas accusing Tyson, JBS, Cargill, and National Beef of price fixing by conspiring to suppress the number of cattle being slaughtered, subsequently driving up the price of meat. The suit also cited unnamed witnesses who used to work in the meat industry who confirmed there was indeed a conspiracy between the meat companies. The allegations are similar to ones in lawsuits filed by grocery stores, ranchers, restaurants, and other wholesalers that have been pending in Minnesota federal court since 2020.

Most of the companies didn't immediately respond to questions about the Sysco lawsuit, but they have defended their actions in other price-fixing lawsuits. Cargill spokesman Daniel Sullivan said his company “is confident in our efforts to maintain market integrity and conduct ethical business. We believe the claims lack merit and intend to vigorously defend our position.”

JBS on the other hand, while not admitting to any wrongdoing, agreed to a $52.5 million settlement in one of the lawsuits in February 2022. Prior to this, JBS paid a $24.5 million settlement in 2020 following accusations of price-fixing claims by pork purchasers. This suit is in addition to JBS’ $27 million settlement paid to resolve charges related to a bank bribery scheme, as we covered in Part 3.

The Justice Department has been investigating the various allegations of price fixing in the industry since 2020, but haven't provided any updates on its investigation. 

 

Part 5 sources: TheCounter.org, USNews, Reuters, Reuters

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