Tyson Class Action Lawsuit Says Beef Prices Are Inflated

A group of grocers claim in a recently filed Tyson Foods class action lawsuit that several major meat packing and processing companies conspired to inflate beef prices.

The lead plaintiff is the bankruptcy trustee for several grocery companies, including Central Grocers, Strack and Van Til Supermarket and SVT. The complaint alleges that defendants Tyson Foods, Cargill, National Beef Packing and JBS USA Food Company Holdings engaged in an illegal price-fixing scheme.

As a result, direct purchasers, including many grocers, allegedly paid a higher price for beef than they would have had the companies followed the law.

“Defendants sit atop the supply and distribution chain that ultimately delivers beef to the market,” the Tyson Foods class action lawsuit argues. “Their vital role is to purchase cattle from the nation’s farmers and ranchers, slaughter and pack cattle into beef, and sell beef to Central Grocers and other Class members. Defendants’ gatekeeping role has enabled them to collusively control both upstream and downstream beef pricing … .”

According to the complaint, the defendants represent the vast majority of the beef market, up to 85%. Cargill, Tyson Foods and the others allegedly began the conspiracy at least as far back as 2015.

In addition to the ability to control the beef supply and distribution chain, the class action lawsuit points to “market characteristics” that allegedly allow Tyson, Cargill and the other defendants to engage in price-fixing, including:

• Characteristics of beef demand by the market
• Entry to the beef market that is difficult for potential competitors
• The nature of beef as a commodity

The plaintiffs say the defendants used these “economic factors” to work and continue to work in concert to limit the supply of beef to the market.

Actions taken by Cargill, Tyson and the other defendants allegedly include limiting the purchase of cattle and processing less meat than their facilities can handle.

The Tyson Foods class action lawsuit argues that publicly available records show the defendants began using “favorable market conditions” to further the alleged beef price-fixing scheme in 2015.

These records reportedly show that the defendants began slaughtering fewer cows at this time and cut production. In addition, the cost of wholesale beef started to shift dramatically, the plaintiffs say, increasing by 59% between 2015 and 2018.

The Tyson Foods class action lawsuit alleges that the defendants entered into illegal agreements to further inflate beef prices.

Selling beef to each other is routine for the defendants, the plaintiffs say, and as a result, information that should have remained secret was shared in these relationships.

Further, the defendant companies allegedly colluded at trade association conferences and industry meetings. The complaint claims that executives and key employees would use these times to further the illegal price-fixing scheme by sharing information and building relationships.

These actions artificially drove up prices for direct purchasers, such as the plaintiff grocers, as well as regular consumers, the class action lawsuit contends, and led to ill-gotten gains for the defendants. The plaintiffs argue that the alleged price-fixing scheme also violates federal antitrust laws.

A similar beef price-fixing class action lawsuit was filed in June 2020 against the same defendants.

Federal Investigations Into Alleged Beef Price-Fixing Scheme

The Tyson Foods class action lawsuit points out that two federal agencies, the Department of Agriculture and Department of Justice, have recently started investigating Tyson Foods, Cargill, and the other defendants for price-fixing. Though the agencies have not yet publicly confirmed their investigations, the plaintiffs say the Department of Justice’s Antitrust Division has sent investigative demands to each defendant.

Further, the plaintiffs point to testimony by the Secretary of Agriculture concerning “suspiciously high beef prices.” In addition, confidential witnesses, including one previous employee of the defendant meat processors, have allegedly confirmed the existence of the scheme. This information has been confirmed by Department of Agriculture records, the plaintiffs say.

The complaint also notes that the investigations were launched after beef prices skyrocketed during the coronavirus pandemic; however, the class action lawsuit argues that the spike related to COVID-19 is but one instance of a broader price-fixing conspiracy.

Have you been affected by a change in beef prices? Tell us what you think about the alleged price-fixing in the comment section below.

The plaintiffs and proposed Class Members are represented by Vincent J. Esades of Heins, Mills & Olson LLP; Jason S. Hartley of Hartley LLP; Daniel R. Karon of Karon LLC; and Douglas A. Millen of Freed Kanner London & Millen LLC.

The Tyson Beef Prices Class Action Lawsuit is Samuels, et al. v. Cargill Inc., et al., Case No. 0:20-cv-01319, in the U.S. District Court for the District of Minnesota.

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