Suit Against Packer Acquisition Draws Praise for Justice Department
Several legislators and agricultural groups are voicing their support of the action.
Compiled by staff
Published: Oct 21, 2008
The action of the U.S. Department of Justice to file an antitrust lawsuit against Brazil-based JBS acquiring the National Beef Packing Company is drawing positive responses from many different sectors.
On Monday, DOJ filed a civil antitrust suit in the U.S. District Court for the Northern District of Illinois. According to DOJ, if not blocked, JBS's acquisition of Kansas City, Mo.-based National would make it the largest U.S. beef packer, with an ability to slaughter more than 40,000 head of cattle per day, or more than one third of U.S. fed cattle packing capacity.
"The combination of JBS and National will likely lead to grocers, food service companies and ultimately American consumers paying higher prices for beef," said Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division. "It will also lessen the competition among packers in the purchase of cattle that has been critical to ensuring competitive prices to the nation's thousands of producers, ranchers and feedlots."
Senators Tom Harkin, D-Iowa, and Charles Grassley, R-Iowa, have both been vocal in their opposition to the acquisition and have urged the DOJ to intervene since the proposed deal was announced in March.
"Thank goodness the Justice Department finally has recognized there is too much concentration in agriculture, and is taking some action to protect consumers and ensure there is a level playing field for independent producers and family farmers." Grassley said. "For some time I believed that antitrust enforcers were asleep at the switch. Today's action couldn't come too soon. Agriculture competition issues need to stay on the Justice Department's radar screen, particularly with the rising cost of food worldwide. The reality is that every American family pays for reduced market opportunities, anticompetitive business practices, and excessive consolidation in agriculture."
The National Cattlemen's Beef Association, R-Calf USA and the American Farm Bureau Federation also commended the Justice Department for there action.
"As JBS has increased its ownership in the packing and cattle feeding industries, NCBA has supported DOJ's efforts to monitor, evaluate, and if necessary act upon these acquisitions," said NCBA President Andy Groseta. "We encourage the process of due diligence and will be closely monitoring this case and the impacts on the beef industry. In particular, we will be making certain that the prices cattle producers receive for their animals do not decrease unfairly."
Joining in the lawsuit with the Department of Justice will be the Attorneys General from Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas and Wyoming.
"We believe the Justice Department and state Attorneys General have an extremely strong case and we are extremely pleased that they have taken action to protect the competitiveness of the U.S. cattle industry," said R-CALF USA President Max Thornsberry.
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Tagged: NCBA, farm, Farm Bureau, American Farm Bureau Federation, National Cattlemen's Beef Association
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