New Antitrust Suit Targets Big 4 Packers
Grocery retailer Giant Eagle filed an antitrust complaint against the Big 4 beef packing companies in Chicago’s U.S. District Court on Wednesday, June 8, 2022.
Giant Eagle, operating about 470 stores in western Pennsylvania, Ohio, northern West Virginia, Maryland and Indiana, alleges the large packing companies exploited their market power by conspiring to limit the supply of beef sold to purchasers beginning as early as January 2015 and continuing through the end of 2021. Giant Eagle contends those actions resulted in higher prices paid for beef by the retailer and higher profits for the packers.
Specifically, Cargill, JBS, National Beef Packing and Tyson Foods are named as defendants along with several subsidiaries. The suit contends the defendants colluded to cut production and artificially constrain the supply of boxed and case-ready beef entering the supply chain to artificially inflate beef prices.
The antitrust complaint notes that the Department of Justice and USDA have launched investigations into whether Defendants fixed beef prices and that the DOJ sent civil investigative demands to the Big 4 seeking information about their pricing practices dating back to January 2015.
The suit also referenced a letter from 26 U.S. Senators to the DOJ that stated: “From our perspective, the anticompetitive practices occurring in the industry today are unambiguous and either our antitrust laws are not being enforced or they are not capable of addressing the apparent oligopoly that so plainly exists.” The letter also alleged the Big 4’s “collective power over the beef processing industry allows them to seemingly control prices at their will.”
Giant Eagle alleges antitrust practices by the Big 4 “led to shortages in the beef market. These artificial conditions, in turn, boosted the prices Defendants charged, and which Giant Eagle had no choice but to pay, for beef. The results intended and achieved by Defendants were higher profit margins (e.g., meat margins) than would have otherwise existed in a competitive market, and injury and damage to Giant Eagle’s businesses and property."
Giant Eagle is a privately held grocery retailer with more than $9.7 billion in annual sales. The company seeks treble damages with the lawsuit.
