Dive Brief:
- The Department of Justice's antitrust division sent investigativeinquiriesto Tyson Foods, JBS SA, Cargill and National Beef following anti-competitive accusations,according to Bloomberg.
- The four companies are the largestmeatpackersin the U.S., controllingmore than 80%of beef processing. The DOJ is reportedly in contact with state attorneys general about the inquiry.
- National Beef told Bloomberg it received the investigative demand from the Justice Department but said "the request was very narrow in scope, which leads us to believe that the DOJ does not necessarily believe there is an antitrust issue."
Dive Insight:
The largest beef processors in the U.S. receiving subpoenas for an antitrust probe is the latest issue for these companies. The meat industry has found itself embroiled in turmoil in recent weeks as it faces worker safety concerns and antitrust accusations amid the pandemic.
美国农业部是already investigatingwhy a rise in beef prices due to pandemic hoarding didn't translate into higher profits for farmers. But many thought a USDA probe wasn't enough.
About two months ago, cattle associationsin 23 statessent a letterurging U.S. Attorney General William Barr and the DOJ to launch its own investigation into possible反竞争actions in the meat industry.Several senatorsand11 state attorneys generalalso pushed the DOJ to investigate. After receiving all of that,President Donald Trumpsaid he asked the DOJto go forward.
As coronavirus started to spread across the country in March,meat sales roseas consumers stockpiled, but that boost didn't increase producers' profits. Wholesale prices for processed beefjumped almost 20%at the start of the pandemic, while theprice paid to ranchers dropped 11%, according to the Food & Environment Reporting Network's Ag Insider.
Consolidation across the beef industry has led to concerns over the years about the authority companies have over suppliers when it comes to prices. Last year, the Ranchers Cattlemen Action Legal Fund United Stockgrowers of America and other cattle ranchersfiled a class action lawsuitaccusing the beef companies of conspiring to minimize prices paid to ranchers for cattle to inflate their own profits. R-CALF USA's CEO Bill Bullard told the Capital Press in March thatthe case is pendingand has been joined by the National Farmers Union.
These subpoenas conclude an especially turbulent week for the meat industry. Current and former top executives at Pilgrim’s Prideand Claxton Poultry Farmswere indicted on Wednesday on charges of conspiracyto fix prices on chickens sold to grocers and restaurants between 2012 and 2017. Those were the first charges from DOJ's investigation into the chicken industry, which was disclosed last yearwhen the department intervenedin a price-fixingclass action lawsuitthat involvedPilgrim's Pride, Perdue Farms, Tyson and Sanderson Farms. Poultry companies have facedmultiplesimilar civil lawsuitsin the past, and aninvestigation by the U.S. Securities and Exchange Commission.
Price-fixing and antitrust accusations and investigations have gone on across the food industry in recent years with other lawsuits involvingdairy,tunaandpork. Many of these cases have ended withguilty defendantsandlarge settlements.
At a time when coronavirusis still spreadingin meat plants and supply issuescould continue, scrutiny on the meat industry is continuing to mount. Afterplant closedbecause thousands of workers tested positive for coronavirus,Trump issued an executive orderto keep doors open and the meat supply chain flowing. Althoughcritics have cautionedthat workersare still at risk in these plants, many have resumed production and stayed opendespite opposition.
If workers continue to get sick and criminal charges are filed from this latest probe, the struggles facing these meat companies may bejustgetting started.
