11 state AGs ask DOJ to probe anticompetitive practices in meat packing industry

Eleven state attorneys general asked the Department of Justice (DOJ) Tuesday to investigate anticompetitive practices in the meat packing industry that they say have been amplified in the midst of the coronavirus pandemic.

The attorneys general, who belong to both major parties and represent largely agricultural states, wrote in a letter to the DOJ that cattle ranchers are being harmed by a consolidation of 80 percent of the industry by four of the nation’s largest beef processors. 

“In this highly concentrated industry, meat packers have achieved sizeable profit margins. Cattle ranchers, however, who for generations have supplied our nation’s beef, are squeezed and often struggle to survive,” they wrote.

“In short, with such high concentration and the threat of increasing consolidation, we have concerns that beef processors are well positioned to coordinate their behavior and create a bottleneck in the cattle industry — to the detriment of ranchers and consumers alike.” 

The attorneys general appeared to be referencing Tyson Foods, Cargill, JBS S.A. and Smithfield Foods, which together process 85 percent of all U.S. beef.

The request from the attorneys general follows a letter last week from Sens. Josh Hawley (R-Mo.) and Tammy Baldwin (D-Wis.) asking the Federal Trade Commission to open an antitrust investigation into the meatpacking industry. 

Several food processing companies have shuttered plants amid outbreaks, though President Trump last week signed an executive order using the Defense Production Act to order meat and poultry processing plants to stay open in an effort to prevent further disruptions to the food supply.

The attorneys general warned that the top four meat processing firms can work to “artificially” lower prices to suppliers and inflating prices for customers.

“Given the concentrated market structure of the beef industry, it may be particularly susceptible to market manipulation, particularly during times of food insecurity, such as the current COVID-19 crisis,” they wrote. 

They request that even if the DOJ does not identify any enforcement actions it can pursue, that it still seek “regulatory strategies” that could “promote competition, address market manipulation, and protect consumers.”