Another Lawsuit Alleges Packer Collusion
America’s Big 4 beef packers face new legal challenges. The trustee for a bankrupt grocery co-op now seeks class-action status in a suit claiming the Big 4 packers conspired to manipulate beef prices paid by wholesalers.
The suit was filed on behalf of the trustee for bankrupt Chicago grocer Central Grocers Inc., Strack and Van Til Super Market and SVT, and seeks treble damages, injunctive relief and demands a jury trial, according to court documents.
The suit was filed in Minneapolis federal court claiming Tyson Foods, JBS USA, Cargill Inc. and National Beef Inc., used their domination of the American beef market to limit cattle supplies that led to significantly higher margins for consumers this spring. The suit claims price-fixing efforts by the defendants since 2015.
Higher meat prices during the COVID-19 pandemic have already drawn the attention of the U.S. Congress, the Justice Department and USDA, which have already launched separate investigations into potential violations of U.S. antitrust laws.
Earlier this week lawyers for the Big 4 told the federal court the Justice Department’s probe into the beef market doesn’t justify civil antitrust lawsuits filed by cattle ranchers, who accuse the meatpacking giants of coordinating to lower the cattle prices they pay to livestock producers. The companies are asking the district judge in Minnesota to toss out the cases, which they say are based on “speculation and gossip,” POLITICO reported.
“There are a lot of things the plaintiffs try to say are nefarious but just aren’t,” Nicole Saharsky, a lawyer for Cargill told POLITICO. “A government request for information as reported by the media does not make this complaint more plausible.”
R-CALF USA and others filed suit last year, alleging antitrust violations and seeking damages for ranchers. Court documents allege the four beef packers began coordinating in 2015 to reduce the number of cattle they slaughtered and the animals they bought directly from ranchers in the cash market in order to depress cattle prices.
Thomas J. Undlin, a lawyer for the ranchers, argued that the DOJ investigation and a related USDA probe are highly relevant to the suits. “The Department of Justice is in the game,” Undlin said. “They’ve started an investigation of the defendants, sent [subpoenas] to defendants and confirmed they are investigating into the cattle and beef processing markets.”
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