R-CALF USA and the Organization for Competitive Markets (OCM) are pleased with today’s announcement reported by Reuters, Sao Paulo, that Brazilian-owned meatpacker JBS has abandoned its bid to take over National Beef Packing Co. (National Beef), the fourth largest U.S. meatpacker. According to the Reuters article, JBS abandoned the takeover due to a “lack of satisfactory conditions.”
R-CALF USA CEO Bill Bullard said this takeover bid was defeated by a combination of aggressive opposition from R-CALF USA and OCM, which led first to a hearing by the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights last May and then to an unprecedented enforcement action by the U.S. Department of Justice and 17 state attorneys general against the merger.
“R-CALF USA and OCM members should be proud that they have achieved their goal of blocking this monumental, anticompetitive merger,” Bullard said.
OCM Executive Director Fred Stokes said this news is extremely welcome and represents a very positive start on what will be a long, hard fight to restore competition to the U.S. cattle market that has already been lost due to previous mergers which resulted in the U.S. cattle market being one of the most concentrated markets in the U.S. economy.
“Now that we’ve stopped this ongoing merger, we must focus our collective efforts on reversing the anticompetitive mergers of the past, including JBS’ 2008 acquisition of the nation’s largest feedlot company when it acquired Smithfield Beef Group,” said Stokes.
Since March 2008, R-CALF USA and OCM aggressively opposed the JBS/National Beef merger on the grounds that it would exacerbate the distortions already evidenced in the U.S. cattle market and would strengthen JBS’ ability to use packer-owned cattle and other forms of captive supplies to manipulate prices paid to hundreds of thousands of independent cattle producers.
“Given the unbridled concentration and consolidation that has occurred in our markets over the past two decades, this is a David versus Goliath type of victory,” said Bullard. “JBS and National Beef are among the most powerful and influential food manufacturing corporations in the world and their attempt to lock up our cattle market has now been defeated by U.S. family farmers and ranchers.”
“U.S. cattle producers should express their appreciation to the Department of Justice and the 17 state attorneys general that stepped up to help our industry preserve the competitiveness of our markets,” concluded Stokes.