Digging Deeper


Do you have concerns about the Smithfield sale to China?

A stress reliever handed out by Smithfield Foods at a conference. (Courtesy Smithfield via Flickr)
A stress reliever handed out by Smithfield Foods at a conference. (Courtesy Smithfield via Flickr)

I imagine the Smithfield reps were sweating while being grilled by Congress this week.

By all accounts, the Senate Agriculture Committee tossed some hard questions to Smithfield CEO Larry Pope, drilling into the news of his company’s proposed sale to China.

I’ve been watching this story since the day the sale was announced. As I reported for NPR, Wall Street was bullish on the plan to sell the world’s largest pork producer, based in Virginia, to China's Shuanghui International. (My apologies for mixing meat metaphors.)

At this week’s hearing, Pope promised the senators that Americans would not see a difference in their bacon, ham and other pork products. As NPR’s Marilyn Geewax reported, using a nice old-school hymnal reference:

But several senators weren't buying the bacon-will-be-unbroken story once Hong Kong-based Shuanghui International Holdings owns Smithfield.

Worried about the impact on the U.S. consumer, farmer and even the taxpayer, they expressed qualms about Chinese intentions.

"Is Shuanghui focused on acquiring Smithfield's technology, which was developed with considerable assistance by U.S. taxpayers?" asked Sen. Debbie Stabenow, the Michigan Democrat who chairs the Senate committee.

In addition to Stabenow’s intellectual property concerns, others have worried about food safety, what with some ugly tainted meat stories recently coming out of China, and foreign investment in the U.S.

The sale is not a done deal. It must first be approved by what USA Today calls a “secretive government panel,” called the Committee on Foreign Investment in the United States. At least one Midwest representative, Sen. Charles Grassley, R-Iowa, said he’s concerned that the deal would lead to even more consolidation of the pork industry.

Already, the top four meatpackers – Smithfield, Tyson Foods, Swift & Co. and Cargill – control 64 percent of the industry, according to Mary Hendrickson at the University of Missouri.

And when the deal was announced, Shuanghui said Smithfield’s use of vertical integration – controlling each step in the supply chain, from baby pigs to pork under plastic – was one of the things that attracted them to the purchase.

“The fact of the matter is that vertical integration leaves the independent producer with even fewer choices of who to buy from and sell to and hurts a farmer’s ability to get a fair price for his products,” Grassley said. “Concentration also leads to consumers having fewer choices and higher costs at the grocery store.” 

What do you think? If you were on this “secretive government panel” would you OK the Smithfield-Shuanghui deal? If so, why? If not, why not? Click here to report your decision to the Harvest Network.