Lawsuit Filed to Block JBS’s Acquisition of Naitonal Beef Packing

The U.S. Department of Justice (DOJ) has filed a lawsuit to stop the country's third and fourth largest beef packers from merging.

The DOJ said that JBS’s acquisition of National Beef Packing would substantially restructure the beef packing industry, eliminating a competitively significant packer and placing more than 80 percent of domestic fed cattle packing capacity in the hands of three firms: JBS, Tyson Foods and Cargill.

It said that, from a price perspective, the move would be bad for both consumers and cattle suppliers.

"The combination of JBS and National will likely lead to grocers, food service companies and ultimately American consumers paying higher prices for beef," said Thomas Barnett, assistant attorney general in charge of the department’s antitrust division.

"It will also lessen the competition among packers in the purchase of cattle that has been critical to ensuring competitive prices to the nation’s thousands of producers, ranchers and feedlots," he added.

JBS, headquartered in Brazil, is in the process of acquiring Smithfield Beef Group from Smithfield Foods, a move that is not being challenged by the DOJ. In 2007, JBS purchased Colorado-based Swift Foods Company.

According to the DOJ, if not blocked, JBS’s acquisition of National would make it the largest US beef packer, with an ability to slaughter more than 40,000 head of cattle per day (or more than one third of U.S. fed cattle packing capacity) and annual sales of more than $14 billion.

Source: FoodProductionDaily.com