The world’s largest fast-food chain is accusing the world’s largest beef companies, including Minnetonka-based Cargill, of illegally colluding to raise prices and boost their profits.
McDonald’s says Cargill, JBS, Tyson and National Beef secretly worked together over the past decade to limit supplies of cattle and fix prices, according to a federal lawsuit filed this month.
Those Big Four meatpackers collectively control 85% of the beef industry in the U.S.
Cargill is a major supplier for Chicago-based McDonald’s, and the companies have a close relationship. Now the Big Mac maker says its partner made “tainted profits” 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 accusations.
“The claims lack merit and we intend to vigorously defend our position,” Cargill said in a statement. “Cargill is confident in our efforts to maintain market integrity and conduct ethical business.”
The case revolves around the meatpackers’ agreement “to jointly manage and reduce their slaughter levels below a competitive level,” the lawsuit says. The coordinated production cuts, which allegedly happened over secret phone calls and meetings, led to higher prices paid for beef even as prices for cattle dropped, widening profit margins for the slaughterhouses.
