Federal investigation expands to major retailers over rising beef prices

Photo credit: Francy Sutherlin Davis

The U.S. Department of Justice has expanded its investigation into rising beef prices, turning its attention to eight of the nation’s largest grocery retailers as consumers continue to pay significantly more for beef.

The retailers included in the investigation are Walmart, Costco, Amazon, Kroger, Publix, Albertsons, Aldi and Ahold Delhaize USA. The Justice Department has requested information from the companies about beef sales, prices, costs, profit margins and purchasing practices.

The move expands a federal review of competition throughout the beef industry. The Justice Department has already been examining the meatpacking side of the market as officials look at whether concentration within the industry or anticompetitive practices may be contributing to the prices consumers are seeing at grocery stores.

Beef prices have climbed sharply. Federal data show beef and veal prices in July were about 9.4% higher than a year earlier, while prices for some individual cuts increased even more. Ground beef was up about 9%, steaks increased 9.6% and roasts were up 13.5%.

However, the investigation does not mean the retailers have been found to have done anything wrong. Federal officials are gathering information to determine whether pricing practices or a lack of competition have played a role in rising costs.

There are also significant supply issues affecting beef prices. The nation’s cattle supply has fallen to levels not seen since the 1950s, while drought and other challenges have affected cattle producers. Justice Department officials have acknowledged that drought and other production problems can affect the beef market even when those issues do not involve violations of antitrust law.

The investigation is aimed at examining more of the path beef takes from cattle producers and meat processors to the grocery store shelf. With families continuing to feel the effects of higher food costs, federal officials are seeking to determine whether consumers are paying higher prices solely because of supply and production pressures or whether competition and pricing practices are also contributing.

At this point, the investigation remains ongoing, and no finding of wrongdoing has been announced against the eight retailers.