Price-fixing settlement amounts to $25 million

A US court has ordered JBS to pay $25 million in a price-fixing settlement. See the Australian reaction here.

The world’s largest meat processing company has been ordered by a US court to pay $25 million to commercial beef purchasers.

JBS, which operates internationally and has interests in Australia, has agreed to pay purchasers who accused the processing company of conspiring with industry competitors to restrict market supply to keep prices at a higher level.

Reuters reports that the settlement was determined in the Minnesota Federal Court.

The recent judgment is the second deal that JBS has had to pay.

The processor agreed last year to pay $52.5 million to grocers and other plaintiffs in the US.

“This co-operation is valuable and will afford access to transactional data, documents, witnesses, and other information without further litigation and expensive discovery — a significant class-wide benefit,” the plaintiffs’ lawyers said in their request for preliminary approval of the deal told Reuters.

However, JBS has denied liability as part of the settlement.

Lawyers for the company did not comment on the matter.

Australian Beef Association chief executive officer David Byard has kept a close eye on the proceedings in the US.

NSW Farmers Association economist Brendan O’Keeffe said it appeared the punishment, in this case, was inadequate.

He said it was important that Australia take the lead and learn from the matter, and industry should work with the Australian Competition and Consumer Commission (ACCC) to keep supply chains transparent.

This was important not just for producers but also for the consumer.

“The overarching issue is the cost of living pressures; we need companies to do the right thing,” he said.

Mr O’Keeffe said from October this year, once the new legislation comes into effect, the penalty for companies who take a similar path would be $50 million.

“That is a stronger punishment,” he said.

“We need proper compliance and enforcement, and this is a (potential) example of where the ACCC needs to be beefed up to enforce changes (here in Australia),” he said.

Australian Beef Association chief executive officer David Byard from Launceston, Tasmania, said he had been watching events play out in the US.

He said the judgment highlights what can happen in the meat industry regarding collusion.

Mr Byard said the court process had effectively put the entire meat industry, and supply chain, on notice.

“It is a case of collusion, and it can happen here or anywhere,” he said.