17 state AGs asked to intervene in purchase of Pilgrim's Pride


Capital Press

Cattlemen's group R-CALF USA is adding firepower to its opposition to the merger of Brazilian beef packer JBS S.A. and poultry processor Pilgrim's Pride.

Last week, the group contacted 17 state attorneys general -- who helped block JBS' acquisition of National Beef Packing Co. in 2008 -- to again request their intervention. The group is also contacting the attorneys general from the other 33 states to ask for assistance.

"The foundation for our concern is that beef and poultry are competing, substitute protein products in the consumer market and that the merger would allow JBS to arbitrarily increase and decrease poultry production and/or raise and lower poultry prices ... to manipulate both the demand for beef and the price for live cattle," R-CALF USA President Max Thornsberry wrote in a letter to the attorneys general.

The group contends the merger would violate antitrust laws by reducing competition between beef and pork and increasing JBS' market power.

The packer is one of the three largest in the United States, controlling about 25 percent of the market. Pilgrim's Pride is the largest poultry broiler processor in the country, controlling 20 percent of production.

"Today, we are faced with a new merger proposal by JBS that, like its proposal in 2008, would further reduce competition in U.S. meat and cattle markets and harm U.S. consumers and U.S. producers," Thornsberry wrote. "We urge you to encourage the Department of Justice to take enforcement action to block the proposed JBS/Pilgrim's Pride merger."

If the merger succeeds, JBS would obtain 64 percent of stock in Texas-based Pilgrim's Pride.

National Cattlemen's Beef Association and U.S. Cattlemen's Association are not opposing the merger.

Staff writer Carol Ryan Dumas is based in Twin Falls, Idaho. E-mail: crdumas@capitalpress.com.

JBS acquisitions in U.S.

* Mid-2007 -- JBS acquires Swift & Co., then the third-largest U.S. beef packer.

* Late 2008 -- JBS acquires Smithfield Beef Group Inc., then the fifth-largest U.S. beef packer, and gained control of the largest U.S. cattle feeding company, Five Rivers Ranch Cattle Feeding.

* Late 2008 -- JBS attempts to acquire National Beef, the fourth-largest U.S. beef packer, and is blocked by the U.S. Department of Justice.

* Currently -- JBS, Tyson Foods, Cargill and National Beef control more than 80 percent of all U.S. fed cattle slaughter.

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