Reuters — JBS has agreed to pay US$52.5 million to settle litigation accusing meatpacking companies of conspiring to limit supply in the $63 billion-a-year U.S. beef market in order to inflate prices and boost profit.
The preliminary settlement by the Brazilian company and its U.S. units with so-called direct purchasers was disclosed on Tuesday, and is the first in nationwide antitrust litigation over beef price-fixing.
Lawyers for the purchasers called the accord an “icebreaker” and an excellent recovery, citing JBS’ $24.5 million settlement in 2020 of price-fixing claims by pork purchasers (all figures US$).
Read Also
U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
In a statement, JBS said it did not admit liability but that settling was in its best interest. It also said it will defend against beef price-fixing claims by other plaintiffs.
The accord requires approval by Chief Judge John Tunheim of the federal court in Minneapolis. Other defendants include Cargill, National Beef Packing Co. and Tyson Foods.
JBS settled one month after U.S. President Joe Biden announced a plan for new rules to bolster competition and stop “exploitation” in the meat sector.
Biden spoke amid concern that a small group of meat packers were capable of dictating beef, pork and poultry prices, adding to inflation pressures caused by rising labour and transportation costs and by COVID-19-related supply constraints.
In their lawsuit, direct purchasers accused the defendants, which controlled an estimated 80 per cent of U.S. fresh and frozen beef supply, of conspiring since 2015 to reduce slaughter volumes, creating a shortfall that smaller companies could not make up.
Commercial beef purchasers and consumers have brought similar lawsuits. Cattle producers also sued, claiming they were paid less than they would have received in a competitive market.
Tunheim also handles litigation concerning the alleged fixing of pork prices. A Chicago federal judge handles litigation concerning the alleged fixing of broiler chicken prices.
— Jonathan Stempel is a Reuters correspondent covering U.S. courts and regulators from New York; additional reporting by Tom Polansek.
