Burger King, Sonic, others file class actions alleging meatpackers fix beef prices

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Burger King, Sonic, beef price-fixing class action overview: 

• Who: Burger joints including Burger King, Sonic and Arby’s have filed class action claims against a group of meatpackers.
• Why: The burger chains allege the meatpackers conspired to fix the price of beef.
• Where: The class action lawsuits were filed in a Florida federal court.

Five burger chains, including Burger King and Sonic, filed class action claims against a group of meatpackers alleging they formed a cartel to fix beef prices.

In the final weeks of 2022, owners of burger chains Arby’s, Sonic, Burger King, Carl’s Jr. and Hardee’s and Whataburger filed five near-identical class action complaints against meatpackers Cargill Inc., JBS SA and Tyson Foods Inc. and their beef supply subsidiaries, and National Beef Co. in a Florida federal court, alleging antitrust claims.

Law firm Carlton Fields PA represents the burger chains in all cases.

According to the complaints, the meatpackers fixed beef prices for the last eight years by creating a cartel to limit competition and create shortages in the wholesale market.

Meatpacking companies conspired after beef margins shrunk, beef price-fixing lawsuits allege

According to the lawsuits, the meatpacking companies controlled more than 80% of the cattle slaughtered in the U.S. for nearly a decade. However, the complaints allege the companies saw their beef margins shrink considerably by the end of 2014. 

In response, they colluded to periodically reduce their purchase and slaughter volumes, close plants without replacing all the lost capacity and keep the savings away from customers including the burger chains, the plaintiffs allege.

“United by their conspiracy, operating defendants were confident that none of them would break ranks and disproportionately expand their beef production to satisfy unmet demand,” the plaintiffs allege. “Armed with this assurance, operating defendants improved their meat margins by achieving and sustaining an unprecedented gap between cattle and beef prices.”

The gap also hurt cattle farmers, the beef price-fixing lawsuits allege. The burger chains seek a court order ending the alleged cartel, as well as triple damages, saying they were financially hurt by paying inflated prices for beef.

“Plaintiff has been injured and will continue to be injured in its businesses and property by paying more for beef purchased directly from Defendants and their co-conspirators than it would have paid and will pay absent the conspiracy,” the beef price-fixing lawsuits state

Meanwhile, four major US meat packers, including Tyson and Cargill, face claims they conspired together to force the price of cattle down and beef prices up to line their own pockets.

What do you think of the allegations against the meatpackers in this case? Let us know in the comments! 

The plaintiffs are represented by David B. Esau, Kristin A. Gore, Garth T. Yearick, Amanda R. Jesteadt, Roger S. Kobert and Aaron A. Holman of Carlton Fields PA.

The beef price-fixing class actions are Whatabrands LLC et al. v. Cargill Inc. et al., Case No. 9:22-cv-81956; Sonic Industries Services Inc. v. Cargill Inc. et al., Case No. 9:22-cv-81952; Restaurant Services Inc. v. Cargill Inc. et al., Case No. 9:22-cv-81951; CKE Restaurants Holdings Inc. v. Cargill Inc. et al., Case No. 9:22-cv-81948; and ARCOP Inc. v. Cargill Inc. et al., Case No. 9:22-cv- 81947, in the U.S. District Court for the Southern District of Florida.

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