JBS will pay US$52.5 million to exit antitrust litigation led by beef wholesalers over an alleged industry wide price-fixing scheme, beef Cartel, becoming the first meatpacker to reach a settlement, reported Bloomberg Law.
The “icebreaker” agreement, docketed late Monday, January 31, would resolve class action claims brought against the Brazilian meatpacking giant on behalf of “direct purchasers” in the US District Court for the District of Minnesota. The Beef Cartel deal also calls for “extensive cooperation” from JBS.
The lawsuit alleges the four packers violated the Sherman Antitrust Act of 1890 by engaging in a price-fixing conspiracy, and alleges the packers violated the Packers and Stockyards Act as well as the Commodity Exchange Act.
The suit alleges that from January 1, 2015, through the present, the four packers conspired to depress the price of fed cattle they purchased from American ranchers, thereby inflating their own margins and profits.
The class action lawsuit seeks to recover the losses suffered by two classes believed harmed by the packing companies’ alleged conduct. The first class includes cattle producers who sold fed cattle to any one of the firms from January 2015 to the present. The second class consists of traders who transacted live cattle futures or options contracts on the Chicago Mercantile Exchange from January 2015 to the present. The complaint, which plaintiffs claim is supported by witness accounts, including a former employee of one of the packers, trade records, and economic evidence, alleges that the packers conspired to artificially depress fed cattle prices through various means.
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