Nineteen Senators penned a letter to Attorney General William Barr, requesting that the Department of Justice investigate the meatpacking industry for anticompetitive activity. The bipartisan letter joined calls made last week by state attorneys general. They alleged that the COVID-19 pandemic has exacerbated existing consolidation in the industry.
“The lack of competition in the meatpacking industry has resulted in a vulnerable beef supply chain, which the current national emergency has destabilized further,” the letter read. “Recent pricing discrepancies between fed cattle and boxed beef are pushing cattle producers and feeders to the brink, adding to the longstanding concerns stemming from the state of competition among beef packers.” The letter said that beef prices have decreased by 18 percent since February, while wholesale beef prices have increased by 115 percent over the same period.
The Senators explained that the meatpacking industry is dominated by four major companies, which control 80 percent of the marketplace. While this letter did not mention the companies, the state attorneys general letter named Tyson Foods, Cargill, JBS, and Smithfield Foods as the leading meatpackers. The Senators specifically raised concerns about the suppressed price of cattle. They “urge the DOJ to review the many dynamics at play here, including the allegations of price manipulation and actions taken to restrict competition.”
The Senators called back to the history of antitrust enforcement, which was subjected to legislation and court rulings a century ago. They stated that the DOJ is in a “unique position” to investigate the nature of any collusion in the industry.
Beyond antitrust claims, the meatpacking industry has faced legal challenges during the COVID-19 pandemic. The major meatpacking companies have claimed that the beef supply chain is in serious jeopardy. The President recently issued an executive order authorizing the Department of Agriculture to ensure meatpacking facilities stay open and comply with CDC guidance. A case against Smithfield Foods, alleging unsafe working conditions during the pandemic, was also remanded to the Occupational Health and Safety Administration.