McDonald’s is suing its top suppliers over a key ingredient

Most people are all too familiar with driving through the McDonald’s drive-thru and ordering a Happy Meal.

There’s nothing quite like the joy of opening the bright red and yellow box to enjoy some fresh salty fries while sipping a crisp Coke and then reaching for a McDonald’s hamburger.

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The thought of no longer having hamburgers as an option on the McDonald’s menu would turn any Happy Meal into a sad one. Unfortunately, the fast food giant may have jeopardized its future supply by taking its biggest bet on its top partners with the unresolved beef.

With more than 41,000 locations worldwide and a menu comprised of more than 50% protein-based products, it’s no surprise that McDonald’s is the world’s largest buyer of beef and pork.

The fast-food giant’s high demand for Big Macs and McDoubles can only be met by purchasing millions, if not billions, of pounds of beef annually from several meatpacking companies, including some of the largest in industry.

During McDonald’s Q2 2024 earnings call, CEO Christopher Kempczinski said that due to inflation and more conscious spending by customers, McDonald’s is looking to expand its value proposition.

Therefore, the fast-food giant decided to extend its $5 meal offer until the end of the year, even though the offer was originally only supposed to be valid for a few weeks in the summer.

While it’s a great way to offer its customers more affordable options, McDonald’s seems to be struggling to keep up with its offerings by keeping prices lower amid recent food price hikes.

After further analysis, McDonald’s found the biggest pricing problem and made a shocking major move to try to fix it.

A Happy Meal is displayed for a photo on a tray at a McDonald’s Corp. restaurant.

Bloomberg/Getty Images

McDonald’s Sues Major Meatpacking Giants for Violating Antitrust Laws

Friday, McDonald’s (MCD) filed an antitrust lawsuit in New York Federal Court against the top four meat producers, Tyson (TSN) JBS (JBSAY) Cargill and National Beef Packing Company (NBP) and their subsidiaries.

These four meatpacking giants control about 80% of the US beef production industry, making them the largest meat processing companies in the entire world.

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McDonald’s is suing these top meat producers for allegedly raising beef prices, which violated federal antitrust laws and fair competition practices.

As alleged in the lawsuit, the meatpacking giants have successfully violated the law since at least 2015 by paying less for cattle and the production process, subsequently limiting supply as prices rise.

According to a letter written in 2021 by 26 US senators that was included in the lawsuit:

“For far too long, cattle producers and consumers have been hurt by the increasing concentration of market power and anti-competitive actions of just a few meatpacking companies. Their collective power over the cattle and beef processing industry allows them to control prices at will.”

The meatpacking giants have faced antitrust lawsuits before

While bad for business, this isn’t the first time some of the accused meatpackers have faced antitrust lawsuits.

In 2021, Tyson agreed to pay a $221.5 million settlement to a lawsuit that accused the company of conspiring to inflate chicken prices, and in 2022, BJS agreed to settle for 52, $2 million in a fixed-price trial.

More retail:

• Waffle House faces backlash from workers
• WeightWatchers is losing weight after dropping another key piece
• Denny’s is bucking the trend of the former executive after the “Grand Slam” flop.

Maybe McDonald’s is also looking for a solid settlement.

The fast-food giant is seeking monetary restitution for the alleged wrongdoing of the accused meat processing companies, but a specific amount has not yet been disclosed.

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