McDonalds has a fever, and according to executives, the solution is NOT fixing its colossal “broken” McFlurry machine crisis - instead, it’s simply biting the hands that feed their friggin money printer. 

(Source: Giphy) 

In short, Ronald and the Gang are suing some of the biggest names in the beef biz - think Tyson, JBS, Cargill, and a few others you’ve probably never heard of unless your idea of a good time is reading meat industry reports.

The accusation? A little thing called price-fixing. You know, allegedly conspiring to jack up beef prices and laughing all the way to the bank while poor Mickey D’s has been dishing out Big Macs at prices that don’t involve a side of “collusion.” Apparently, this price manipulation has been happening since 2015, and McDonald’s is just now getting fed up with it. 

(Source: Reuters) 

Interesting, more details puhlease… 

First off, McDonald’s claims these meatpacking giants have been (allegedly) working together to limit the supply of beef, which—surprise, surprise—has driven prices through the roof. According to the lawsuit filed in Brooklyn federal court, the meat producers reduced their slaughter volumes and used that cute little trick to inflate the price of beef. McDonald’s, along with other plaintiffs like Target and Aldi (of course Aldi is in on this, because nothing screams “budget-conscious” like Aldi), says it’s been paying a premium for its patties.

But, but, but… it’s not just McDonalds, Target, or Aldi’s feeling the burning of the grill. You see, as it turns out, cattle producers (yes, the very honest Americans supplying the dang cows) are also suing these same meatpackers - claiming they’ve been losing billions because of this alleged conspiracy. So yeah, this is just one big girthy, beefy mess.

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(Source: Giphy) 

Now, call me crazy, but isn’t it a little ironic that McDonald’s, which has built an empire on squeezing every last penny out of its suppliers and customers alike, is now turning around and accusing its beef suppliers of squeezing them?

I mean, this is the same company that makes you pay extra for a slice of cheese on a cheeseburger, but sure, let’s file a lawsuit for artificially high beef prices. Feels a bit like the pot calling the kettle overpriced, doesn’t it?

(Source: Giphy) 

Oh and like mentioned earlier, the home of the golden arches is notorious for playing the ultimate mood killer with their McFlurry machines. So maybe, just maybe, they should focus on fixing those before they start trying to fix the entire beef industry. I don’t know, just a thought.

But alas, in case you’re wondering whether this is McDonald’s first rodeo with beef lawsuits, think again. This whole price-fixing drama has been going on for a while. Back in 2020, the U.S. Department of Justice started poking around after cattle prices didn’t seem to be lining up with what fast-food chains like McDonald’s were paying.

(Source: USDA.gov) 

Then in 2021, 26 U.S. Senators (because apparently beef is bipartisan?) sent a letter asking for investigations. And now, McDonalds says they want unspecified monetary damages. Translation: they want a lot of money—and for the court to put an end to this nonsense once and for all. Because paying three times the inflated price for beef is something even Ronald and poor Grimace can’t stomach forever.

(Source: House.gov) 

Now with that said, what makes this all the more juicy is that these beef suppliers control 80% of the U.S. fresh and frozen beef market. So when they sneeze, McDonald’s catches a cold. Or in this case, when they cut back on slaughter-ready cattle, McDonald’s gets hit with higher prices and needs to pass the cost onto you—hence why your Big Mac combo now costs more than a kidney. 

(Source: Snopes) 

But let’s be real here, shall we? Mickey D’s isn’t hurting for cash. Especially considering they have some room in their net operating cash flow which so happened to explode 30.12% to $9.61 billion last year. Yet, still, despite the cushion - these beef price hikes are just too much for McDonalds to push under the rug. So now, we’ve got lawsuits flying, meat suppliers sweating, and McDonald’s hoping to get its beef (and its pricing) back under control.

(Source: Giphy) 

And if all this sounds like a soap opera set in a slaughterhouse, that’s because it kind of is. So stay tuned for the next episode of “As the Beef Turns”, where we find out if McDonald’s can actually win this case—or if they’ll end up with a side of large legal fees instead of fries. 

In the meantime, keep an eye on McDonalds who dipped -0.96% yesterday (up 20.38% over the last month) and these major beef producers - and as always, stay safe and stay frosty, friends! Until next time…

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Stocks.News holds positions in McDonalds as mentioned in the article.