Posted at 5:00 a.m.
Are we paying too much for our beef? In the midst of soaring food inflation, a “cartel” formed by the largest beef producers has been fixing the price of this meat for years, to the detriment of Quebec consumers, supports a class action request filed in the Superior Court of Quebec.
“In the context of inflation, it’s something that adds to the price of beef. We are touching on something as fundamental as food. It really affects everyone, including people who have little means, ”explains in an interview Sylvie de Bellefeuille, lawyer at Option consommateurs and plaintiff of the class action.
This recourse could potentially amount to several million dollars for Quebecers, since anyone who has purchased beef in Quebec since 1er January 2015 is covered by the application for authorization. Like other meats, the price of beef continues to rise in grocery stores and has jumped 16.8% over the past year, according to Statistics Canada.
Four American beef processing giants and their Canadian companies are singled out in the motion, namely Cargill, JBS Food Company, Tyson Foods and National Beef Packing Company.
These competitors have allegedly been conspiring since 2015 to fix the price of beef, when they control about 85% of the Canadian market and 80% of the US market, the petition says.
“At least from 1er January 2015, and to this day, the Defendants conspire among themselves and with others to fix, maintain, control, prevent, reduce or eliminate the production or supply of beef and to fix, maintain, increase or control the price of it in Quebec, and elsewhere, and thus to unduly reduce competition”, advances the request for authorization filed by the Belleau Lapointe firm on March 24.
These beef giants come at the very end of the meat processing process, when the animals have reached their slaughter weight. This is referred to as “slaughter steers”. They then buy the animals from dairy producers or animal “fattening” specialists, and process the carcasses.
These companies primarily sell their meat as pre-cut and packaged meat, referred to as “carton box beef” (boxed beef), and “ready-to-eat beef”, in particular to frozen food manufacturers and various wholesalers. Eventually, their beef ends up in grocery stores, butchers, supermarkets and restaurants.
This structure of the beef market “promotes the alleged conspiracy,” argue the plaintiffs, due to market concentration, “significant barriers to entry” and “opportunities to engage in anti-competitive acts” for the companies involved.
Difficult to prove
The sum claimed for the millions of potential class members is not quantified by the plaintiffs. That said, they are asking the Superior Court to condemn the companies concerned to pay the equivalent of their income generated by the “artificially inflated portion of the selling price of beef purchased in Quebec”. The class action must first be authorized by a judge, then decided on the merits. A process of several years, unless there is a settlement.
“These appeals are not easy. It is not easy to demonstrate that these companies are responsible for having set prices artificially. For example, the Competition Bureau has been working on the bread cartel since 2015 and they have had nothing, except with confessions, ”illustrates Sylvain Charlebois, senior director of the Laboratory of Analytical Sciences in Agrifood at Dalhousie University.
The agri-food expert points out that retailer margins are important for the sale of meat, at 40 to 60%.
“Does that surprise me? No. Did this consultation have major impacts? I’ve no idea. But it’s certainly not an easy thing to prove,” comments Maurice Doyon, full professor in the department of agro-food economics and consumer sciences at Université Laval.
The Biden administration is getting on it
This request for collective action seems to be inspired by similar actions in the United States, filed following the mobilization of several attorneys general.
Last February, the giant JBS has also reached a settlement agreement of 52 million US as part of a class action on the fixing of beef prices.
The beef industry is also in the crosshairs of the Biden administration. Last July, the American president implemented measures to increase competition in the beef industry, dominated by four major producers.
“When dominant intermediaries control the supply chain so much, they can increase their own profits at the expense of farmers – who make less money – and consumers, who will pay more,” the White House wrote last January. detailing the president’s plan.
The companies targeted by the class action request did not respond to our interview requests.