The biggest fast-food network in the world is accusing the biggest pork producers of conspiring against them to increase prices and increase profits.
In a federal lawsuit filed this month, McDonald’s claims that Cargill, JBS, Tyson, and National Beef have collaborated in secret over the past ten years to control animals materials and repair prices.
The U.S. meat industry is 85 % owned by those Big Four meatpackers, who collectively control 85 % of it.
Cargill is a major provider for Chicago-based McDonald’s, and the businesses have  , a close relationship. Then the Big Mac manufacturer says its companion made “tainted earnings” from “illegal behavior”.
” 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 — that is, prices artificially higher than beef prices would have been in the absence of their conspiracy”, the lawsuit says.
Cargill denies the charges.
” The claims have significance and we intend to rapidly defend our place”, Cargill said in a statement. ” Cargill is comfortable in our efforts to maintain market fidelity and carry social business.”
The meatpackers ‘ agreement to” coordinate and reduce their murder rates below a competitive level” is the subject of the case, according to the lawsuit. The organized production cuts, which reportedly occurred through secret telephone calls and discussions, resulted in higher beef costs even as animals prices dropped, widening profit margins for the slaughterhouses.
Though the fit does n’t phone out the impact on consumers, McDonald’s and another fast-food stores are under extreme consumer pressure after , raising list prices over the past many years , and are looking to manage costs wherever possible. McDonald’s earnings remain powerful, yet.
” You actually look at]profit ] margin in the 20 years pre-COVID, we’re actually at a high right now versus those 20 years”, McDonald’s USA President Joseph Erlinger told analysts this summer.
Many other companies, including Target, have sued the Big Four meatpackers with identical antitrust allegations in federal court in Minnesota. Following a fire at a Tyson grow in 2019, both the Target and McDonald’s situations point to a popular decline in production.
The claims claimed that” the parallel and coordinated decline in production in the face of a huge supply restraint cannot be justified by reputable factors.”
A wider selection of meat and poultry firms have  , settled competitive litigation, including wage-fixing claims, over the past several decades to the tune of hundreds of millions of dollars. Some of those circumstances involve a data firm, Agri Stats, collecting and disseminating what the Department of Justice called “anti-competitive” data.
Minnesota-based Hormel Foods and Cargill both agreed to settle wage-fixing meets this summers.
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