Over the summer McDonald’s endured customer pushback over the prices of its burgers. Now, the fast-food chain is suggesting there was a reason beyond its control. The company is suing its beef suppliers, accusing them of keeping supplies low in order to charge high prices.
McDonald’s complaint alleges its suppliers, which include Tyson Foods, JBS, Cargill and National Beef Packing simultaneously reduced their output in order to limit beef supplies and drive up prices.
“Only colluding meatpackers would expect to benefit by reducing their prices and purchases of slaughtered cattle, fully aware that their conspiracy would shield them from the pressures of a competitive market,” McDonald’s said in a statement.
McDonald’s also claims the alleged collusion is not a recent development, but has been the norm since at least 2015. Earlier this year, when McDonald’s reported disappointing fourth-quarter earnings, it had to admit that its prices were partly responsible.
“I think what you’re going to see as you head into 2024 is probably more attention to what I would describe as affordability,” McDonald’s CEO Chris Kempczinski said on the conference call.
$5 value meal
In June, McDonald’s introduced a limited-time $5 value meal that most franchisees have extended to the end of the year. It was aimed at winning back some customers who were put off by rising menu prices.
“Not only have their prices gone through the roof (literally cheaper to eat at a sit-down restaurant and faster) but they also now ALWAYS make you park and wait for food,” Jilaine, of Altamonte Springs, Fla., wrote in a ConsumerAffairs review.
In its suit, McDonald’s is asking for unspecified monetary damages and has requested a jury trial.