The Justice Department is formally demanding information from the country’s four biggest meatpackers over potential antitrust violations, according to a person familiar with the matter, deepening scrutiny of an industry that’s been riled by shutdowns due to the coronavirus.
The department’s antitrust division sent civil investigative demands, which are akin to subpoenas, to the companies and is talking with state attorneys general about the probe after a group of states called for an investigation, said the person, who declined to be named because the inquiry is confidential.
Meatpacking is highly consolidated with four companies --
National Beef, based in Kansas City, Missouri, confirmed receiving a civil investigative demand from the Justice Department.
“The request was very narrow in scope, which leads us to believe that the DOJ does not necessarily believe there is an antitrust issue,” the company said.
Tyson, JBS and Cargill didn’t respond to a request for comment.
The Justice Department subpoenas to the meatpackers follow
The U.S. is grappling with a meat crisis after the coronavirus pandemic sickened thousands of workers at slaughterhouses and forced plants to close. The producers have such a stranglehold on output that even a few closures create bottlenecks that ripple through the supply chain.
The disruptions led to meat shortages and higher prices, prompting President Donald Trump to sign an executive order to keep plants running. While companies have taken measures to protect workers such as increasing hand-washing stations, distributing face shields and doing temperature checks, experts and unions warn that employees are still being put in
The plant shutdowns sparked calls from states and lawmakers on Capitol Hill for an investigation of the industry. In May, a bipartisan group of attorneys general wrote to Attorney General Bill Barr, complaining there are signs the beef processors are using their power to drive down prices paid to cattle ranchers while consumers pay inflated prices.
“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,” they said.
A spokeswoman for the Nebraska Attorney General’s office, which signed on to the letter, declined to comment about the Justice Department investigation. Representatives for the attorneys general of Colorado and Iowa, which also joined it, didn’t respond to requests for comment.
(Updates with National Beef statement in fifth paragraph)
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