U.S. Markets close in 6 hrs 8 mins

Hagens Berman: Consumers Sue Leading Beef Manufacturers for Massive Antitrust Price-Fixing Scheme

ST. PAUL, Minn.--(BUSINESS WIRE)--

Attorneys say $100B beef industry has been bilking consumers since 2015

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.

If 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 and poultry industries against many of the same defendants. Hagens Berman also recovered $52 million for consumers for anticompetitive conduct in the dairy industry.

Find out more about the class-action lawsuit against the beef industry on behalf of consumers in the U.S.

About Hagens Berman

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/