Sysco Corporation has filed a lawsuit in the U.S. District Court for the southern district of Texas, against the ‘Big Four, alleging “an illegal conspiracy to increase the wholesale price for beef” from 2015 through to the present. According to the complaint, the Big Four (Cargill, Inc., JBS U.S., National Beef and Tyson Foods) represent an oligopoly controlling over 80 percent of cattle slaughtered
Sysco maintains that this concentration was conducive to a conspiracy to limit supply, and increase prices paid compared to wholesale prices that may have pertained in a competitive environment. To support their case, Sysco has compiled statistics relating to spreads between farm and wholesale prices and claims to have testimony from a witness who can attest to the existence of a conspiracy among packers.
Given the failure of the Department of Justice to convict five executives of two broiler companies of collusion in three consecutive trials, Sysco may have a difficult task in pursuing their claim. The Department of Justice had statistics, documentation, e-mails, a witness and corporate settlements without prevailing in a criminal trial. The Sysco lawsuit has the hallmark of a shakedown.