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Senate Antitrust Subcommittee on JBS

Sandhusker

Well-known member
Senate Antitrust Subcommittee to Justice Department:

Block Proposed JBS Acquisitions

Washington, D.C. – Today, Sen. Herb Kohl, D-Wis., acting in his capacity as chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, sent a formal letter to the U.S. Department of Justice to request that the acquisitions of National Beef Packing Co., Smithfield Beef Group and Five Rivers Ranch Cattle Feeding by Brazilian-owned JBS be blocked because “these acquisitions are likely to result in substantially increased market power for JBS Swift and the other two remaining national beef processors, significantly lower prices to ranchers and higher prices for beef consumers.”

“R-CALF USA is grateful that the chairman of the subcommittee has taken such a strong position against this merger, recognizing that it will cause harm to both producers and consumers, and we hope the chairman’s letter will help to encourage the Justice Department and state attorneys general to work aggressively to block this merger as well,” said R-CALF USA CEO Bill Bullard.

Kohl wrote that these acquisitions, if permitted to proceed, would likely cause substantial harm to competition and consumers, would be contrary to section 7 of the Clayton Act, which forbids any merger or acquisition when the ‘effect of such acquisition may be substantially to lessen competition, or tend to create a monopoly,’ and that these acquisitions would give JBS alone control of nearly one-third of the U.S. cattle market.

“The likely anti-competitive effects of permitting such a high level of concentration in an already concentrated market are plain to see,” the letter states in part. “By reducing the number of major buyers for ranchers’ cattle from five to three – and in some regions even one or two – this deal will give the remaining beef processors enormous buying power. With little choice to whom to sell their cattle, ranchers will increasingly be left in a ‘take it or leave it’ position. On the national level, the JBS Swift acquisitions would combine 11 meat packing plants now owned by three meatpackers under the single ownership of JBS Swift. On the regional level, many ranchers and feed lot operators will be left with only one, and at best two, meat packing plants to sell their cattle…

“…these acquisitions are likely to substantially injure competition for cattle sold by independent ranchers for slaughter, likely to substantially increase the market power of three remaining national meatpacking firms and significantly reduce the prices ranchers are able to obtain for their cattle,” the letter continues.

“These acquisitions also raise serious concerns that the three major meatpacking firms will substantially increase their market power in the downstream market – finished beef sold to supermarkets, small grocery stores, butcher shops and restaurants,” Kohl adds in his correspondence. “Reducing the number of major suppliers of beef from five to three obviously leaves retailers and restaurants, and ultimately consumers, with significantly fewer competitive choices.”

Note: To view Kohl’s letter to the Justice Department, visit the “Competition Issues” link at www.r-calfusa.com.
 

PORKER

Well-known member
What needs to happen is the same thing that the corn growers did when corn got too cheap ,they built ethenol plants that the biggies didn't have and the rest is history. Notice that the surplus is gone and the price of corn is gone through the roof. Same thing would happen if small packing plants sprung up in every cattle state, local sales would take care of the price nationally.
 

Sandhusker

Well-known member
"“The likely anti-competitive effects of permitting such a high level of concentration in an already concentrated market are plain to see,”

Unless you're a certain 4-letter packer-lackey group....
 

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