McDonald’s filed a lawsuit against the four largest beef producers in the United States, alleging that they conspired to limit beef supplies and therefore cause the fast-food chain to pay more for the beef it purchases.
The lawsuit was filed on October 4 in the United States District Court, Eastern District of New York in Brooklyn.
Such a lawsuit might not seem that pertinent to readers of WATTPoultry.com or FeedStrategy.com, but when you look at the defendant companies, all of them are connected to the poultry and feed industries.
The lawsuit alleges that “at least as early as approximately January 1, 2015, and continuing through the present and with an effect thereafter,” JBS, Tyson Foods, Cargill and National Beef, and subsidiaries of those four companies, “engaged in a contract, combination or conspiracy in restraint of trade” with the goal to “fix, raise, stabilize and/or maintain the price of beef sold to (the) plaintiff.”
Let’s look at these four companies.
JBS, according to WATT’s Top Poultry Companies and Top Feed Companies databases, is the world’s largest broiler producer and the world’s 13th largest feed producer.
Tyson Foods is the world’s second largest poultry producer and ninth largest feed producer. In the United States, it is the largest broiler company and the sixth largest turkey producer.
Cargill is the world’s 12th largest poultry producer and the world’s fourth largest feed producer. It ranks as the largest U.S.-based feed company and third largest turkey company.
National Beef is majority owned by Brazil’s Marfrig Global Foods, and Marfrig is also the majority owner of BRF, the world’s third largest poultry producer and 14th largest feed producer. Marfrig itself is the world’s 132nd largest feed producer.
McDonald’s lawsuit against these four companies is not unique. We’ve been covering similar suits that allege industry collusion -- whether it be the broiler, turkey, pork or beef industries -- for a number of years now. But in that coverage, we have seen most defendant companies reach settlements with the plaintiffs, not because they are admitting guilt of any collusion, but to stop being distracted by lawsuits.
Those settlements come with multi-million-dollar price tags, and they are made after heaven only knows how much time and money was spent before the settlements.
The larger and more diversified an agrifood company becomes, the more it subjects itself to such lawsuits deemed by many as frivolous. However, when resources are drained from beef operations, in this case, it likely has an impact the overall company, and therefore, on its poultry, feed or pork operations.
And because of that, I believe such lawsuits aren’t good for any of those industries.
