McDonald's Sues Meat Suppliers Claiming Price Fixing Has Inflated Costs

When it comes to the cost of beef, McDonald's definitely isn't lovin' it.

The fast food giant is suing the four biggest U.S. meat processing and packing companies over allegations they colluded to drive up prices by limiting supplies of beef — despite an increasing appetite for the key ingredient in hamburgers.

In court papers filed Friday, McDonald's said the alleged price-fixing scheme "was intended to and did inflict continuing harm" on its business of selling Big Macs, Quarter Pounders and other burgers.

"United by their conspiracy, Operating Defendants were confident that none of them would defect and disproportionately expand their beef production to satisfy unmet demand," according to the lawsuit.

The 100-page complaint filed in U.S. District Court in Brooklyn, New York, seeks unspecified, triple damages from Cargill, JBS, Tyson Foods and National Beef Packing.

McDonald's also wants a court order barring the companies from "continuing, maintaining or renewing" the alleged conspiracy.

None of the defendants returned requests for comment, according to Reuters, which first reported on the case Monday.

McDonald's lawsuit includes charts that show the companies and their affiliates control more than 80% of the U.S. beef market and that their annual production decreased after 2015, the year the conspiracy allegedly began.

The lawsuit alleges that by 2019, none had "returned to their pre-2015 levels despite record profitability."

It also cites comments by Tyson executive John Gerber at a November 2018 conference where he said consumers "will pay more for beef, and have to pay more for beef because it is worth more."

"There is value out there in chicken and pork, but unless you have been living under a great big rock the last two years, you know that beef demand is off the charts," Gerber said. "We have a lot of supply coming at us, but we have been able to hold the price at a pretty good level, because of beef demand, it's been really good, and I think it will stay good."

The lawsuit is the latest to accuse the meatpackers of violating the antitrust Sherman Act, which bars competing companies from agreeing to fix prices, divide markets or rig bids, according to Reuters.

The companies have denied any wrongdoing in the earlier cases, in which the plaintiffs include BJ's Wholesale, Sodexo, Target and Aldi, Reuters said.

Those lawsuits have been consolidated in U.S. District Court in Minneapolis.

McDonald's stock was trading at $301.51 a share early Tuesday afternoon, up 0.2%