McDonald’s accuses meatpackers of price-fixing in beef cost lawsuit

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McDonald’s has sued the four largest US beef producers, alleging they conspired to raise the price of meat paid by the world’s largest burger chain.

The lawsuit filed in federal court in New York follows similar litigation brought by cattle ranchers and supermarkets, as well as federal investigations into the U.S. cattle and beef markets. Cargill, JBS, National Beef and Tyson Foods were named as defendants.

The case pits two industry powerhouses against each other: McDonald’s, which serves millions of hamburgers a day, versus the meat producers whose slaughterhouses control the majority of U.S. beef production capacity. McDonald’s makes its claims after a period of broad inflationary pressure that has put it in the crosshairs of politicians.

In its civil suit, McDonald’s alleged that the meatpackers and the alleged co-conspirators “engaged in a contract, combination or conspiracy in restraint of trade or commerce,” in violation of antitrust law, for the purpose of selling at prices “artificially higher than beef prices”. were in the absence of their conspiracy’.

Cargill, JBS, National Beef, Tyson Foods and McDonald’s did not immediately respond to requests for comment.

McDonald’s said one way the beef companies conspired was to suppress the prices they paid for cattle fattened for slaughter, which supported margins on the beef they sold. They “exploited their pivotal role in the process of buying cattle to produce beef to collusively control cattle prices and downstream beef prices” since at least 2015, McDonald’s lawsuit alleged.

U.S. factories slaughtered 32.8 million head of cattle in 2023, producing 27 billion lbs of beef, according to the U.S. Department of Agriculture.

McDonald’s is pursuing some of the largest wholesale suppliers it has had relationships with for decades. The fast-food giant had US revenue of $10.6 billion last year, or about 41% of global revenue.

His lawsuit follows class action lawsuits brought by cattle ranchers and beef customers against major packing companies. New York-listed Tyson disclosed that it received requests for information on the cattle and beef packaging markets in 2020 and 2021 from the antitrust division of the US Department of Justice.

Federal antitrust authorities have also investigated allegations of price manipulation in the poultry market. In 2021, Pilgrim’s Pride, which is majority-owned by Brazil’s JBS, pleaded guilty and was ordered to pay $107 million in fines for a broiler price-fixing conspiracy.

Like most restaurant chains, McDonald’s has raised prices in the years since the pandemic in the face of labor shortages and supply disruptions. But more recently, it has offered new discounts to win back customers put off by inflation.