A Seattle law firm has filed a class-action lawsuit against four of the country’s largest meatpackers and a price forecasting service, alleging that the meat processors have suppressed the prices they pay for cattle and inflated the prices they charge consumers. Cargill, Tyson Foods, National Beef Packing Co. and JBS USA are named in the lawsuit along with Agri Stats Inc., reports the Minneapolis Star Tribune.
The lawsuit was filed in U.S. District Court in Minnesota by the law firm Hagens Berman. The plaintiffs, a beef consumer in Wisconsin and one in Nevada, argue that the decoupling of the price of cattle and the retail price of beef is the result of price-fixing by the meatpacking companies, which boosted their profit margins in recent years.
“Our complaint alleges that families nationwide have been overpaying for years for beef products they buy routinely, unknowingly paying inflated prices fixed by a scheme to limit beef supplies,” said Steve Berman, managing partner of Hagens Berman and attorney representing consumers in the class-action lawsuit against the meatpacking defendants. “The result: this $100 billion industry reaped billions of dollars in extra profits while consumers paid far more for beef than they should have. We intend to put an end to it.”
The class action seeks to recover losses consumers faced under the price-fixing scheme, as well as injunctive relief from the court to put an end to the anticompetitive behavior. The case brings counts of violations of federal and state antitrust laws and unfair competition, unjust enrichment and consumer protection laws.
The lawsuit alleges that defendants, “entered into a conspiracy to extract maximum profits from the distribution channel of beef – by both extracting all gains from the ranchers who raised the cattle, as well as artificially inflating the price of beef being sold to the consumer.” The suit goes on to say that defendants, “engaged in a concerted scheme to suppress throughput of beef, artificially depressing both the amount of cattle they purchased and the amount of processed beef they sold to retail operations. The purpose of the scheme was to maximize the margins they received from sale of beef – by both underpaying the farmers, and simultaneously ensuring an overcharge to the consumer.”
The Star Tribune reported that cattle farmers in Minnesota are skeptical of the lawsuit, said Ashley Kohls, executive director of the Minnesota State Cattlemen's Association whose family raises beef cows near Hutchinson.
Kohls said that while farmers have been frustrated with the low prices for their cattle, the market is rebounding and her members are satisfied that the meatpackers are not conspiring to manipulate the market.
"There's a lot of confusion about why this lawsuit is necessary," Kohls said. "In our opinion, the answers that they're trying to find in the lawsuit have already been found, in the Senate Judiciary Committee investigation and the GAO study."
Kohls referred to a 2016 investigation by the Senate Judiciary Committee and a 2018 investigation by the U.S. Government Accountability Office. Neither investigation found evidence of wrongdoing.
Cargill issues the following statement: "For many years, Cargill has served as a trusted partner to American cattle ranchers, committed to supporting their family farms and livelihoods," the statement said. "We believe the claims lack merit, and we are confident in our efforts to maintain market integrity and conduct ethical business.”
Source: Minneapolis Star Tribune, Hagens Berman