June 8, 2020

US Department of Justice issues subpoenas to major US meatpackers

The US Department of Justice (DOJ) formally demanded Tyson Foods, Cargill, JBS USA and National Beef to provide information about alleged antitrust violations regarding their pricing power over livestock producers, Bloomberg reported.

Civil investigative demands, similar to subpoenas were issued to the companies after several states called for an investigation to be conducted. Bloomberg's source declined to be named as this is a confidential investigation.

Tyson Foods, Cargill, JBS USA and National Beef account for 80% of beef processing in the United States.

National Beef said it has received a civil investigative demand from the DOJ, but said the narrow scope provided by the department showed that it might not be an antitrust issue.

The other three companies have not commented.

The subpoenas were issued after current and former executives of poultry processor Pilgrim's Pride were indicted over price-fixing allegations for chicken sold to retail and fast food restaurants.

The COVID-19 pandemic has infected thousands of meatpacking workers and forced these facilities to close temporarily, resulting in disruptions on the country's meat supply chain.

US President Donald Trump issued an executive order to force meat plants to stay open. The companies have introduced new measures to protect workers from the pandemic, such as distribution of protective wearables like face shields, conducting temperature checks and more hand-washing areas, workers unions and experts say the workers are still susceptible to the virus.

A bipartisan group of attorneys wrote to Bill Barr, Attorney General in May about allegations that beef processors are driving down livestock prices paid to producers while simultaneously increasing prices to consumers. None of the attorneys in the group have responded for requests to comment on the DOJ investigation.

-      Bloomberg