Groups Urge Rejection of Shuanghui’s Acquisition of Smithfield Foods
Washington, D.C. – In preparation for today’s Senate Agriculture Committee hearing on the proposal by Chinese-owned Shuanghui International Holdings, Ltd. (Shuanghui) to purchase U.S.-owned Smithfield foods (Smithfield), R-CALF USA and 16 farm, consumer and trade groups sent a comprehensive, 12-page letter to 9 of President Obama’s cabinet members urging them to reject the proposed sale.
The groups wrote that the proposed sale "poses an unacceptable national security risk, undermines the safety and security of the U.S. food supply, threatens the environment and economy of rural communities, provides significant taxpayer-financed technology and intellectual property to foreign competitors and will raise the cost of food for American consumers."
According to the Foreign Investment and National Security Act of 2007, the U.S. can reject an acquisition of a U.S.-based business by foreign investors if the sale would potentially disrupt the critical infrastructure of the United States.
The group’s letter suggests the acquisition would do just that, disrupting the U.S. food supply, agriculture land and rural economies. In addition, the groups argue the proposed sale would have a debilitating impact on national security.
"In the simplest terms, Smithfield is a significant supplier of pork products to U.S. military installations. If the merger were approved by CFIUS, the Chinese-owned Smithfield would control a portion of the food supplied to U.S. troops," the letter states.
Other reasons cited for prohibiting the sale include the potential implications for food safety:
"Shuanghui’s takeover could compromise the food safety at U.S. Smithfield plants as they absorb the management culture from China’s food processing industry. China’s food supply has suffered from the persistent trend of ‘economically motivated adulteration’ and a culture of adulteration in China’s food and agricultural sector. The purchase could export the less rigorous Chinese food manufacturing standards and business culture to Smithfield and erode its food quality and safety practices."
Yet another reason for the group’s objection to the proposed sale is that it would accelerated the ongoing global concentration of the food system and meat supply, which would further harm rural economies. The groups warn that there is already a dangerous trend associated with foreign acquisitions of U.S. food processors:
"Shuanghui’s proposed takeover of Smithfield is only the latest in a string of foreign takeovers of U.S. meat and poultry processors over the past five years. Brazil’s JBS purchased both Swift & Co.’s beef and pork business as well as the poultry integrator Pilgrim’s Pride Corp.; Brazil’s Marfrig Alimentos purchased poultry processor Keystone Foods; Mexico’s Sigma Alimentos bought the Bar-S Foods packaged meat business; Mexico’s Industrias Bachoco took over poultry integrator OK Foods; Ukraine’s Omtron made a significant partnership purchase of poultry company Townsends, Inc.; and South Korea’s Harim USA bought the poultry firm Allen Family Foods," the letter states.
"The U.S. should not wait until it wakes up one morning to find that it is suddenly dependent on foreign countries and foreign companies for its food," said R-CALF USA CEO Bill Bullard adding, "The Foreign Investment Committee should block this proposed sale and cabinet members should begin establishing a long-term food security plan for the United States."
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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is the largest producer-only cattle trade association in the United States. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. For more information, visit www.r-calfusa.com or, call 406-252-2516.