For the average person, the prices they pay tend to be retail which means cost of product plus margin added in and if it makes sense, they look to lower the cost by buying wholesale or when things are in sale (although most of the time it just means the margin for the store is lowered to make room for the new items at higher margins). The average person would love to get the costs the big chains receive, for the big chains will be offer volume discounts and a host of other things. It is also expected, the big chains will have a better understanding of the market, because they have people monitoring it to ensure their negotiations reflect where the market is going.

In an article from Reuters, a store with over 39,000 stores and one of the biggest sellers of meat is suing the large meat processing and packing companies for allegedly conspiring for years to limit beef supplies and making the company pay higher prices.

If you follow the large meat processing and packing companies, you will aware that over the years there are fewer companies and the ones that exist are very large. The companies include JBS, Tyson Foods, Cargill and National Beef.

One would think large companies dealing with large companies, they would benefit perhaps small and medium sized companies would be at a disadvantage. However, McDonald’s wrote in their brief: only colluding meat packers would expect to benefit by reducing their prices and purchases of slaughtered cattle because they would know that their conspiracy would shield them from the dynamics of a competitive marketplace.

The meat packers have denied any wrongdoing in related cases that have consolidated in Minnesota federal court. McDonald’s filed in the Brooklyn federal court.

Cattle producers who said they sold animals directly to the meat packers for slaughter said they lost billions in the alleged scheme.

McDonald’s is seeking unspecified monetary damages and a court to order an end to the alleged price-fixing conspiracy.

Linking to dividend paying stocks, it is not unusual for companies to be sued, it is unusual for a relatively small number of companies that control the market to be sued by someone else than the government. McDonald’s wants money and lower prices to ensure it keeps its margins. Should it win, it would receive compensation, but courts move slowly so do not expect the money quickly coming to the company or potentially lower prices at McDonald’s. One thing the Donald Trump lawsuits have taught everyone, if there is an ability to cause delay, delays will happen. It is generally not a great idea to invest based on lawsuits.

There are more questions than answers, till the next time – to raising questions.