Attorneys say $100B beef industry has been bilking consumers since
ST. PAUL, Minn. -- (Business Wire)
A federal class-action
lawsuit has revealed that a nationwide cartel of leading meatpacking
manufacturers in the $100 billion beef industry forced consumers to pay
high prices for steak, hamburgers and other beef products, according to
the law firm bringing the case, Hagens Berman.
According to the lawsuit filed Apr. 26, 2019 in the U.S. District Court
for the District of Minnesota, the price-fixing scheme has been carried
out by the biggest names in the industry who control approximately 75
percent of the beef-packing market.
you purchased any fresh or frozen beef products, you may be entitled to
reimbursement. Find out your rights to potential compensation and learn
more about the lawsuit.
The defendants – Tyson, Cargill, National Beef and JBS – are responsible
for purchasing beef from ranchers, processing the beef and selling it to
retail businesses for purchase by consumers, and attorneys say they have
been bilking consumers since 2015 by artificially limiting the amount of
beef they purchase, process and sell to retail operations.
“Our complaint alleges that families nationwide have been overpaying for
years for beef products they buy routinely, unknowingly paying inflated
prices fixed by a scheme to limit beef supplies,” said Steve Berman,
managing partner of Hagens Berman and attorney representing consumers in
the class-action lawsuit against the meatpacking defendants. “The
result: this $100 billion industry reaped billions of dollars in extra
profits while consumers paid far more for beef than they should have. We
intend to put an end to it.”
The class action seeks to recover losses consumers faced under the
price-fixing scheme, as well as injunctive relief from the court to put
an end to the anticompetitive behavior. The case brings counts of
violations of federal and state antitrust laws and unfair competition,
unjust enrichment and consumer protection laws.
The lawsuit alleges that 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 suit goes on to say that defendants “engaged in a concerted scheme
to suppress throughput of beef, artificially depressing both the amount
of cattle they purchased and the amount of processed beef they sold to
retail operations. The purpose of the scheme was to maximize the margins
they received from sale of beef – by both underpaying the farmers, and
simultaneously ensuring an overcharge to the consumer.”
According to an industry insider quoted in the suit, “meat works like
the mafia.” Executives at companies in the meatpacking industry all know
each other, according to the insider, and someone may be a competitor
but also a customer.
The defendants colluded on their purchases of cattle from ranchers by
restricting the amount of cattle they purchased and bid rigging
practices that depressed the price of cattle that the defendants
purchased through auctions, attorneys claims. Defendants’ actions
created an artificial shortage of beef, which harmed consumers by
elevating the price they paid for beef.
The lawsuit alleges that prior to the anticompetitive conduct, the price
of cattle sold to the defendants and the price of beef sold by
defendants moved in tandem. Following the anticompetitive conduct, the
price of cattle fell while the price of beef remained elevated.
“It’s a matter of common sense that the prices of cattle and beef should
move together because beef is simply processed cattle,” said Berman.
“But these leading meatpacking manufacturers manipulated the market so
this natural economic relationship broke down.”
Agri Stats, an industry forecasting service, assisted the meatpacking
defendants, the suit states. Agri Stats has played a key role in both
the poultry and swine industries by aiding and abetting the sharing of
confidential information that allowed the profits of poultry and pork
manufacturers to soar.
Agri Stats’ reports are at the center of other similar price-fixing
lawsuits in the poultry and pig industries.
Agri Stats, through its subsidiary, Express Markets, first entered the
beef industry in 2015. In the beef industry, Express Markets executives
stated that they provided “supply and demand side analysis and
forecasting of cattle numbers and beef supplies as well as domestic and
international trade impacts,” according to the complaint. Prior to the
entrance of Express Markets into the beef industry, the suit’s
defendants reported margins for their beef business significantly lower
than their margins in the chicken and pork businesses where Agri Stats
was already active. After Express Markets entered the beef business,
defendants’ profits soared. By 2018, defendants Tyson and JBS reported
higher margins for their beef business than for their respective chicken
and pork businesses.
Hagens Berman has taken the lead in similar cases in the protein
industry. Hagens Berman is currently interim lead counsel on behalf of
consumers in cases in the pork
industries against many of the same defendants. Hagens Berman also
million for consumers for anticompetitive conduct in the dairy
out more about the class-action lawsuit against the beef industry on
behalf of consumers in the U.S.
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law
firm with nine offices across the country. The firm’s tenacious drive
for plaintiffs’ rights has earned it numerous national accolades, awards
and titles of “Most Feared Plaintiff’s Firm,” and MVPs and Trailblazers
of class-action law. More about the law firm and its successes can be
found at www.hbsslaw.com.
Follow the firm for updates and news at @ClassActionLaw.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190426005617/en/
Source: Hagens Berman Sobol Shapiro LLP
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