May 31, 2013
A bid by Shuanghui International, also known as Shineway, to purchase Smithfield Foods for $4.7 billion became national news this week. Shuanghui is the majority shareholder of China’s largest meat processor and, according to the Wall Street Journal, sources most of its products from private farmers – a practice that has been scrutinized in China “amid a spate of food scandals in which poorly regulated small farms played a role.”
The merger prompted concerned reactions from members of Congress regarding market competition and food safety. Senator Chuck Grassley (R-Iowa) stated, “I share the concerns of many family farmers and independent producers that the agriculture industry has consolidated to the point where many smaller market participants do not have equal access to fair and competitive markets. [The] announcement by Smithfield and Shuanghui do not alleviate those concerns.”
Representative Rosa DeLauro (D-CT) similarly commented on the food safety concerns associated with the merger, stating, “I have deep doubts about whether this merger best serves American consumers and urge federal regulators to put their concerns first.”
These concerns are not unfounded. Shuanghui Chairman Wan Long is reported to have said that he wants to increase the amount of pigs that come from company-owned farms. Smithfield controls nearly a third of the U.S. pork-processing industry and is one of four firms that together control over 70 percent of the industry. Smithfield owns other common pork-product brands, such as Armour and Farmland, and most of Smithfield’s sales occur in the United States.
This announcement comes as the full Senate prepares to continue consideration of the Senate Farm Bill next week. Several floor amendments have been offered that address some of these fair competition concerns. NSAC supports the following amendments in the Senate:
You can follow these and other amendments that we are watching closely by visiting our Amendment Tracker, which we will update as the Farm Bill debate continues.