Groups Urge Vigorous Review of JBS Merger

By CnAgri Print

Five statewide cattle groups and R-CALF USA joined in a letter with 37 U.S.-based farm and consumer groups to collectively urge the U.S. Department of Justice (Justice Department) to "undertake an expanded, probing, and in-depth investigation into the proposal by JBS USA to acquire two U.S.-based beef packing plants owned by Canadian-based XL Four Star Beef."

JBS reportedly has an option to purchase two meatpacking plants from XL Four Star Beef, one in Nampa, Idaho, and the other in Omaha, Neb.

In their letter, the groups state that they believe the proposed merger would reduce competition and seriously harm both cattle producers and consumers.

The group's letter called the 2008 enforcement action by the Justice Department that blocked the then proposed JBS and National Beef Packing Company merger "a historic event that marked a long-awaited turning point in the heretofore unmitigated trend toward price-distorting, oligopolistic meatpacking concentration nationally."

"The Justice Department must not retreat from the historically significant effort it started in 2008 to curb the pervasive erosion of competition in both the U.S. cattle market and the consumers' beef market," the letter continued.

Specifically, the groups urged the Justice Department to request additional information from the proposed merger participants to determine the cattle procurement practices in all of the regions where the merger participants presently operate and the level of competition that currently exists in those regions.

The groups also want the Justice Department to determine "the number of occurrences where employees or agents of either of the merger participants have cooperated or coordinated their cattle-buying activities among or between each other or with other meatpackers or feedlots, and the historic price differential for the types of cattle procured in the marketing regions of the merger participants compared to the prices paid for comparable cattle in other regions."

"We therefore request that no early termination of the antitrust evaluation regarding the acquisition of the two U.S.-based beef packing plants be granted and that the Justice Department make a second request for information to extend the investigation," the groups wrote.