The Biden administration vowed Wednesday to crack down on illegal price-fixing in the meat industry and blamed soaring food prices on the practice.
Members of President Biden‘s economic team said four businesses control 85% of the U.S. meat processing market and accused them of “pandemic profiteering.”
The U.S. meat processing sector includes beef, pork and poultry and the administration said the four dominant companies are responsible for the more than 50% increase in prices consumers have seen at the grocery store this year.
“Just four large conglomerates control the majority of the market for each of these three products, and the data show that these companies have been raising prices while generating record profits during the pandemic,” the economic team wrote on a White House blog.
The White House also said those companies are collecting excessive profits while benefiting from COVID-19 relief money and increased demand for their products.
The four largest meat processors in the U.S. are Cargill, Tyson Foods Inc., National Beef Packing Co. and JBS SA, a Brazilian company.
Tyson Foods said the company “categorically rejects” the White House’s allegations that it’s artificially inflating food prices. The company said in a statement that COVID-19 and severe weather conditions, including a drought, reduced the supply of beef while demand increased, leading to the price spikes.
“It is inaccurate to suggest that consolidation in the meat processing industry is leading to higher prices for consumers,” the company said.
Mr. Biden’s economic team laid out a series of initiatives they said will crack down on anti-competitive practices in the meat industry:
• Distribute $1.4 billion in COVID-19 pandemic stimulus funds to small meat producers and workers;
• Spend another $500 million of COVID-19 relief funds to create a new grant program supporting meat company startups;
• Step up enforcement of antitrust laws through the Justice Department and probe allegations of price-fixing.
Justice and Agriculture investigators had already opened an investigation into price-fixing in the chicken-processing industry, they said.
The administration also called on Congress to pass legislation that would improve transparency in how companies set the price of beef.
“Goal number one is to make sure that farmers get a fair return for their investment and the second goal is to make sure that when consumers go to the grocery store and at the checkout counter, they get fair prices,” Agriculture Secretary Tom Vilsack said at a White House press briefing.
National Economic Council Director Brian Deese said it was “striking” how much the meat industry has been impacted by consolidation.
“When you see the level of consolidation and the increase in prices, it raises a concern about companies that are driving price increases in a way that hurts consumers who are going to the grocery store, and also isn’t benefiting the actual producers, the farmers and the ranchers, that are growing the product,” he said at the briefing.
The Biden administration has been increasing efforts to lower food prices that are among an array of goods hit with inflation.
In July, Mr. Biden signed an executive order aimed at increasing competition and rein in monopolies in the meat and poultry industries.