Dive Brief:
- Cargill Inc. has agreed to pay $32.5 million to settle a class action lawsuit that accuses the meatpacking giant of conspiring with other companies to artificially raise the price of turkeys.
- The deal, filed in the U.S. District Court for the Northern District of Illinois last week, still needs to be approved by a court. Cargill is the second producer to settle in the case, with Tyson Foods agreeing to pay $4.62 million in 2021.
- The lawsuit accused Cargill and Tyson, plus other major producers such as Butterball LLC and Perdue Farms, of coordinating to intentionally reduce U.S. turkey supply with the aim of raising consumer prices.
Dive Insight:
A class action lawsuit filed in 2019 claims that, for years, the nation's largest turkey producers illegally increased prices in a scheme that cost consumers millions of dollars and forced grocery stores to pay higher prices for deli meats and other products.
Meat producers, including the owners of brands such as Boar's Head and Jennie-O, allegedly used data company Agri Stats to exchange sensitive information about production and pricing, according to the lawsuit. The complaint said Agri Stats' data allowed producers to "engage in collusion to restrain the supply of turkey by facilitating information exchange about supply levels throughout the industry."
The lawsuit, which encompasses meatpacker activities from 2010 to 2017, alleged that companies kept production intentionally low during a period of high demand in order to reap more profits.
The meat producers named in the suit controlled approximately 80% of the wholesale turkey market, according to the complaint. Cargill makes up to 21% of the turkey market, according to the settlement agreement.
The settlement adds to a litany of price-fixing and wage-suppressing allegations against some of the largest U.S. meatpackers. Tyson agreed to pay $221 million to settle a chicken price-fixing suit in 2021. Cargill and Perdue Farms also reached settlement agreements to resolve claims that producers conspired to depress worker pay.
Cargill declined to comment, citing settlement terms. A settlement agreement does not imply an admission of wrongdoing.
