Iowa Senator Calls for Scrutiny of Smithfield Sale
Iowa Senator Chuck Grassley says witnesses at last week's Senate Agriculture Committee hearing regarding the proposed purchase of Smithfield Foods by Chinese food company Shuanghui International presented a number of questions for Congress and the various oversight agencies to consider. The Senator also asked his own questions about the sale's impact on the involvement of the Chinese government in the company, the food supply and food safety and security and the ability of independent livestock producers and other U.S. companies to compete. As far as the food supply - Grassley is concerned with the idea of a Chinese food company controlling a major U.S. meat supplier without strong safety inspection standards, without any shareholder accountability and without robust quality control mechanisms. Given the heavy hand the Chinese government can have in private business - Grassley believes it's also important to understand the role of the Chinese government in the company purchasing Smithfield. Finally - Grassley wants the anti-trust division of the Justice Department to consider the special characteristics of agriculture when reviewing this proposal.
Grassley says the latter is part of his ongoing effort to look out for independent livestock producers trying to compete in a marketplace where there's a continued trend to more vertical integration. He says non-Smithfield growers could be shut out of the marketplace as a company like Smithfield becomes even more capital rich. Grassley says independent producers need to be able to market their products for a fair price. He says competition is important for consumers too - as concentration can result in fewer choices and higher prices for the consumer.
Despite his concerns - Grassley recognizes there are benefits with the proposed purchase. He says it does create export opportunities for producers - which is good news for an industry that saw domestic consumption fall during the last few years.
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