Possible collusion in the meatpacking industry under review

Paraguay’s National Competition Commission (Conacom) has opened an ex officio preliminary investigation into the high level of concentration in the meatpacking industry and its potential effects on price formation, according to ValorAgro.

The analysis distinguishes between two market segments: cattle procurement and beef sales, both showing highly concentrated structures.

In cattle procurement, the market displays oligopsony characteristics, as a small number of slaughterhouses concentrate most of the demand, giving them significant bargaining power over producers. In beef sales, the structure resembles an oligopoly, with a limited number of companies concentrating supply, both in the domestic market and in exports.

According to Conacom’s Director of Investigation, Ricardo Gavilán, market concentration does not constitute a violation, but may facilitate anticompetitive behavior, such as price coordination among firms that should be competing with one another. A recent study by the authority found that three exporting meatpackers account for around 70% of slaughter and commercialization.

The investigation is in its final stage of analysis and a decision on whether to open a formal administrative proceeding could be made next week, marking the transition from a preliminary phase to a full investigation into potential price-fixing practices, particularly in cattle procurement.