According to a Company release on February 2nd, JBS USA has agreed to pay $53 million to settle litigation alleging price-fixing in beef supply. In 2020, JBS paid $25 million to settle price-fixing claims relating to pork.
The settlement requires approval of Judge John Tunheim, Chief U.S. District Judge of the U.S. District Court for the District of Minnesota. The case will proceed against other defendants including Tyson Foods, Cargill Inc. and National Beef Packing Company. The lawsuit alleges that from 2015 onwards, the defendants colluded in restricting capacity thereby creating an artificial shortage that resulted in higher prices to direct purchasers. The “Big Four” are apparently responsible for packing and distribution of 80 percent of U.S. beef consumed.
Lawyers for the plaintiffs regard the settlement as an “icebreaker” that presages further negotiations and possible settlements before the case proceeds to trial. The settlement was negotiated against backdrop of negative Administration comments regarding concentration in the beef and pork industries, allegedly allowing the major packers to establish prices that have apparently contributed to inflation, now a significant political as well as economic issue.
The packers have responded to Administration statements claiming that inflation is a reflection of higher costs of labor, transport, utilities, port congestion and disruption in supply chains with justifiable confirmation.