McDonald’s is suing its beef suppliers over price fixing

McDonald’s is suing some of its suppliers over allegations they violated antitrust law by collaborating to sell beef to the chain at artificially inflated prices. The lawsuit, filed Oct. 4, names Cargill, JBS USA Food Company, Swift Beef Company, JBS Packerland, National Beef Packing Company, Tyson Foods, and Tyson Fresh Meats as the defendants, claiming their price fixing actions date back to “at least as early as Jan. 1, 2015.”

“The goal of their conspiracy was to fix, raise, stabilize, and/or maintain the price of beef sold to (McDonald’s) and others at supra-competitive levels – prices artificially higher than beef prices would have been in the absence of their conspiracy,” McDonald’s claims.

The quick-service giant added that the conspiracy was “effective and achieved that goal.”

“Only colluding meatpackers would expect to benefit by reducing their prices and purchases of slaughtered cattle because they would know that their conspiracy would shield them from the dynamics of a competitive marketplace,” McDonald’s said.

Just how inflated those prices were, however, will require some investigation, the company said. Together, the defendants listed make up the vast majority of the fresh and frozen beef supplier market in the United States, at about 80%, according to the lawsuit. The next largest has 2%-3% of share.

Both the U.S. Department of Justice and the U.S. Department of Agriculture have launched investigations.