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McDonald's has launched a lawsuit against four of the world’s largest meat producers, accusing them of colluding to raise beef prices unlawfully. The case, filed on October 4 in a New York federal court, names Tyson Foods, Cargill, JBS, and National Beef Packing as defendants. These companies collectively control 82 percent of the beef market based on a 2021 report by the National Economic Council.

The lawsuit follows an open letter by McDonald's President Joe Erlinger in May, addressing rising prices for the chain's menu items. Erlinger cited increased labor, food, and paper costs but did not mention the alleged conspiracy by meat producers to limit beef supplies, thus inflating prices. A striking revelation from the complaint is the assertion that, from 2019 to 2024, the average price of McDonald's menu items increased by 40 percent despite the company's denial of price hikes exceeding inflation rates.

The allegations state that the meat producers’ actions aimed to "fix, raise, stabilize and/or maintain the price of beef" at artificially high levels, impacting what McDonald's and other buyers paid. The company detailed that the historical price correlation between cattle and wholesale beef began to significantly deviate around 2015, with a divergence reaching $156.50 by 2021 according to U.S. Department of Agriculture data. By the end of 2021, Tyson Foods and JBS USA reported record profits in their beef segments, the lawsuit notes.

McDonald's is not alone in its accusations. Other plaintiffs, including ranchers, cattle sellers, consumers, and beef buyers, have lodged similar complaints against the same meatpackers. These cases have been consolidated in Minnesota federal court. In prior cases, the meatpackers have denied wrongdoing. JBS, however, agreed to a $52.5 million settlement in 2022 in one claim from direct purchasers.

Government scrutiny has also intensified. The Justice Department sent subpoenas to these meatpackers in 2020 for an antitrust probe. Moreover, nearly 30 lawmakers urged the department in 2021 to investigate the companies' grip on the beef processing market. Legislators highlighted the disparity between plummeting live cattle prices and rising boxed beef prices, attributing consumer and producer losses to the major meat companies' practices.

Other major retailers such as Target, BJ’s Wholesale Club, Gordon Food Service, and Glazier Foods have filed similar antitrust lawsuits using the same New York law firm representing McDonald’s. The Biden administration has likewise criticized the disproportionate profit margins of meat processors during the pandemic, emphasizing that wholesale beef prices surged while the costs paid to ranchers stagnated.

The recent consumer price index from the U.S. Bureau of Labor Statistics reinforces the lawsuit's claims, reporting that from August 2023 to August 2024, beef and veal prices rose by 4.2 percent, with uncooked ground beef prices soaring by 4.9 percent.

The lawsuit highlights ongoing concerns about market practices in the beef industry and their impact on consumers and independent producers, as well as the significant legal and regulatory scrutiny faced by the big four meatpackers.