Brazil's largest meat giant JBS has been the first to offer a $52.5 million settlement in a lawsuit in the United States over illegal price-fixing in the beef industry. Other defendants in this lawsuit include meat giants such as Cargill Inc, National Beef Packing Co and Tyson Foods Inc.
For years, the 'Big Meat' in the US limited the supply to such an extent that prices were pushed up in this multi-billion dollar market. Two years ago, JBS reached a settlement of more than $24 million in a similar case over price inflation in the pork sector.
JBS reached the new multimillion-dollar settlement a month after US President Joe Biden announced a plan for new rules to strengthen competition and stop “exploitation” in the meat sector. It is expected that the other meat companies will now also soon pay compensation claims in order to avoid a judicial conviction.
Lawyers for the complaining supermarkets and consumers called the agreement an "ice breaker". In a statement, JBS said it admits no liability, but a settlement was in its best interest. The deal still requires the approval of Chief Justice John Tunheim of the Minneapolis federal court.
Shortly after his election, President Biden expressed concern that a small group of meat packers were able to dictate the prices of beef, pork and poultry, creating inflationary pressures from rising labor and transportation costs and COVID-19-related supply constraints.
In this lawsuit, traders, supermarkets and buyers accused the global meat giants, which controlled an estimated 80% of the U.S. beef market, of conspiring since 2015 to reduce slaughter volumes, creating a deficit that smaller companies could not make up.