Tyson Foods and Cargill have agreed to pay a combined $87.5 million (C$122.1 million) to settle a federal lawsuit brought by consumers who accused the companies of conspiring to inflate U.S. beef prices by restricting supply.
The preliminary class action settlements were filed on Monday in federal court in Minnesota and require a judge’s approval.
Tyson, the largest U.S. meat company, will pay $55 million. Cargill agreed to pay $32.5 million. The proposed accords are the first for consumers in the price-fixing litigation, which began in 2019.
Read Also
War is increasing food prices, insecurity say IMF, World Bank and UN food agency
The World Bank, International Monetary Fund and the U.N. World Food Programme warn that sharp increases in oil, natural gas and fertilizer prices triggered by the war in the Middle East will cause rising food prices and food insecurity.
Attorneys for the plaintiffs have estimated there are about 36 million potential class members in 26 states and the District of Columbia.
Tyson, based in Arkansas, and Minnesota-based Cargill agreed to cooperate with the consumers as they pursue price-fixing claims against the remaining defendants, JBS USA and National Beef Packing.
Tyson and Cargill did not immediately respond to requests for comment, and neither did JBS and National Beef. The defendants have all denied any wrongdoing.
Lead attorneys for the consumers on Monday declined to comment.
Eligible class members are individuals who indirectly purchased beef products — such as chuck, loin and ribs — between August 2014 and December 2019 from stores such as Walmart and Costco. The retailers are not named as defendants.
An expert for the plaintiffs said he estimates total damages to the consumer class at $1.9 billion.
The plaintiffs’ lawyers said they have spent tens of thousands of hours pursuing the lawsuit. They said they will ask the court to award them up to 33.3 per cent of the settlement, or $29 million, in legal fees.
Tyson last week agreed to pay $85 million to settle a lawsuit by consumers who accused it of conspiring with rivals to inflate pork prices. Tyson denied wrongdoing in that case.
Earlier this year, JBS reached a $83.5 million settlement resolving price-fixing claims from ranchers and other plaintiffs, but not consumers. JBS has denied any wrongdoing.
