The nation’s largest food distributor is accusing the big 4 meat packers of fixing prices and manipulating markets. Sysco has filed a lawsuit against Cargill, JBS, Tyson and National Beef, accusing them of violating antitrust laws and colluding since 2015 to reduce their purchases of cattle, thereby driving down livestock prices and increasing meat prices.
Filed in Texas federal court, where Sysco is based, the case is set to proceed before a judge in Houston.
According to the lawsuit, a former quality assurance officer at a JBS facility “has confirmed the existence of a conspiracy” among the beef packers, which is corroborated by statistics that show “industry-wide slaughter and capacity reductions.”
By exploiting their market power, the companies have “created surpluses in the cattle market and shortages in the wholesale beef market,” artificially raising their profit margins higher than they can achieve under competitive conditions, the complaint reads.
A Cargill spokesman told the Washington Post the company “is confident in our efforts to maintain market integrity and conduct ethical business. We believe the claims lack merit and intend to vigorously defend our position.”
The Sysco lawsuit notes that the Justice Department launched investigations into accusations against the Big 4 for price fixing in 2020, though the government has yet to provide updates on the probe.
The new lawsuit is similar to cases filed by groups representing ranchers, food companies and consumers that are still pending in federal court in Minnesota. Earlier this year, the judge rejected a request by packers to dismiss the case, ruling that submitted testimony represented “sufficiently detailed direct evidence” to proceed with the antitrust litigation.
In February, JBS settled a beef price-fixing case, paying $52.3 million to direct beef purchases. The settlement was the first in the U.S. of litigation over beef price-fixing.