Price-Fixing Settlements In Meat Industry Not Likely To Change The System

Feb 4, 2021

Several large meat processing companies recently settled price-fixing lawsuits, but it’s unlikely those payments will change much in the food business, experts say.

Tyson agreed to a $221.5 million settlement with three consumer and purchasing groups that filed suit against the poultry giant. Chicken producer Pilgrim’s Pride and pork company JBS also settled similar complaints. 

A series of studies at Purdue University show it’s less expensive for companies to continue price fixing and pay fines instead of reforming their practices.

So, the hundreds of millions paid out will not likely change how these large meat companies do business, according to antitrust advocates such asPeter Carstensen of the University of Wisconsin law school.

“These kinds of lawsuits, and settling them doesn’t make companies change the way they do business,” said Carstensen who has studied competition in the agriculture sector for 40 years. “It requires a real focus on how these industries operate. And how you can create a more workably competitive environment.”

Such change will now likely fall to Tom Vilsack, President Joe Biden’s nominee to be Secretary of Agriculture. He served in the same capacity during the Obama administration.

The U.S. Department of Agriculture would have the power to put rules into place that diminish the power of a few large corporations to control most aspects of meat production and distribution.

One of the main criticisms of Vilsack is that he has been too friendly with large agricultural companies and doesn’t have a track record of sticking up for small, independent farmers.

“I think he failed in the Obama years to follow through on his stated recognition in 2009-2010 that there were serious competitive problems,” Carstensen said.

Activists are worried this could continue.

“Vilsack has made a career of catering to the whims of corporate agriculture giants – some of whom he has gone to work for – while failing to fight for struggling family farmers at every turn,” said Mitch Jones, director of Food & Water Policy Watch, a food, environmental and justice advocacy group.

Vilsack could not be reached for comment.