In a bold legal move, McDonald’s has initiated a lawsuit against several leading meat producers, including Tyson Foods, Cargill Inc., JBS, and Swift Beef Company. Filed on October 4 in the Eastern District of New York, the lawsuit accuses these giants of manipulating beef prices through collusion—a strategy purportedly aimed at inflating costs unjustifiably.
According to the complaint, these meat packers allegedly engaged in price fixing by coordinating to underpay suppliers for fed cattle while curbing beef output. This manipulation enabled them to enhance their margins and profits without the fear of competition undercutting them. “By collusively underpaying suppliers for fed cattle, and over time reducing beef output, Defendants have been able to increase their margins and profits, confident that none of them would take volume from each other,” McDonald’s stated in the lawsuit.
The fast-food titan contends that this conspiracy began around 2015 and persisted into subsequent years, affecting the prices at which McDonald’s procured beef for its vast array of products. During this period, the named defendants, recognized as the world’s largest meat providers, allegedly sold about 80% of the 25 million pounds of U.S. market beef in 2018 and controlled between 81% and 85% of market-ready beef from 2015 to 2024. It is noteworthy that many of the companies named in the suit did not see income declines during the pandemic.
The timing of the lawsuit is critical as it coincides with growing scrutiny over the high costs of fast food, often attributed to minimum wage increases, such as those in California. However, McDonald’s legal stance shifts the focus from wage policy impacts to alleged anticompetitive practices within the beef supply chain.
The U.S. Department of Agriculture and the U.S. Department of Justice have reportedly opened investigations into these price fixing allegations, which further supports McDonald’s claims.
The complaint also highlights a curious trend: from 2015 to 2019, the defendants’ annual cattle slaughter rates were lower compared to the previous seven years—a period when independent packer slaughter numbers rose.
McDonald’s argues that such coordinated behavior among the meatpackers deviates from competitive market dynamics, implying that “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.”
As McDonald’s confronts this alleged collusion head-on, the case may not only reshape its supply chain costs but also alter the broader narrative surrounding the reasons behind the soaring prices of fast food, distancing it from the often-cited labor cost increases due to higher minimum wages.
