JBS-Swift take case to the Senate

8 May 2008

JBS-Swift & Co CEO Wesley Batista has told a Senate judiciary subcommittee hearing that his company's proposed acquisitions of National Beef Packing Co and Smithfield Beef Group would not reduce market competition.

Some cattle producers have raised the concern that the merger would effectively reduce the number of cattle buyers from five to three, subjecting cattle producers to depressed prices and costing consumers more at retail. Senator Herbert Kohl shares those concerns, which is why he called for a hearing of the Antitrust, Competition Policy and Consumer Rights subcommittee. Batista told the panel that JBS-Swift plan to continue their strategy of maximising production, improving plant operations and increasing sales domestically and abroad, which requires the purchase of more cattle. As far as the ‘beef belt' is concerned, JBS, Cargill, Tyson and regional and local plants ‘will continue to compete intensely for the purchase of cattle', he said. Steve Hunt, CEO of US Premium Beef, the majority owner of National Beef, added that ‘the livelihood of all cattle producers depends on the health and the growth of the beef industry, which is why we agree with JBS's vision.' But opponents to packer consolidation, including R-Calf CEO Bill Bullard, don't agree, saying the buying power JBS would have would put many independent producers out of business, especially the fewer than 80,000 beef cattle operations that have herd sizes of more than 100 head.

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