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A recent price-fixing class action claims that Tyson and other meat companies conspired to increase the price of beef.
According to plaintiff Kenneth Peterson, Tyson Foods Inc., Cargill Inc., JBS USA, and National Beef Co. control 70 percent of the beef-packing industry which allows them to manipulate the market to their benefit.
Peterson references an “industry insider” in his beef price-fixing class action. The insider reportedly told him that the “beef industry is very unique” and that “meat works like the mafia.”
All of the meat executives reportedly know each other from their dealings and the companies sell meat to each other during various stages of production.
Utilizing these connections, the companies allegedly conspire together to restrict the amount of cattle they all purchase, thereby creating a shortage of beef in the industry. As a result, the price of beef is allegedly increased while the price of cattle decreased.
Although the price of cattle decreased from the companies’ alleged actions, consumers reportedly continue to pay high prices for beef products.
Peterson claims that this is the result of a conspiracy between the meat companies in which they agree not to compete against each other. Before the conspiracy, the prices of beef and cattle allegedly increased and decreased in similar ways.
“The 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 Tyson class action states.
In order to coordinate their alleged price-fixing conspiracy, Peterson claims that the companies used Agri Stats Inc., a service used to forecast industry prices and trends. Agri Stats reportedly collects industry information and gives that pricing data to the meat companies.
The Tyson beef class action claims that this practice allows Tyson, Cargill, JBS USA, and National Beef Co. to coordinate their decisions and implement their price-fixing scheme. As a result of the company’s involvement, Peterson included Agri Stats as a defendant in his price-fixing class action lawsuit.
Peterson argues that the price-fixing scheme injured consumers such as himself because they are forced to pay a higher price for beef products.
“This $100 billion industry reaped billions of dollars in extra profits while consumers paid far more for beef than they should have,” Peterson’s counsel said in a statement, according to Law360. “We intend to put an end to it.”
Peterson seeks to represent a Class of consumers who purchased beef from Tyson Foods Inc., Cargill Inc., JBS USA, and National Beef Co. since 2015.
The Tyson price-fixing class action lawsuit seeks damages, interest, court costs, and attorneys’ fees.
The consumers are represented by Steve W. Berman, Shana E. Scarlett and Rio S. Pierce of Hagens Berman Sobol Shapiro LLP and Brian D. Clark, W. Joseph Bruckner, Elizabeth R. Odette, Brian D. Clark, Arielle S. Wagner, Karl L. Cambronne, Bryan L. Bleichner and Jeffrey D. Bores of Lockridge Grindal Nauen PLLP.
The Tyson Beef Price-Fixing Class Action Lawsuit is Peterson, et al. v. Agri Stats Inc., et al., Case No. 0:19-cv-01129, in the U.S. District Court for the District of Minnesota.
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