AGs sue to block controversial meatpacking deal

Chris Rizo Oct. 20, 2008, 11:57am

Lori Swanson (D)

Steve Six (D)

CHICAGO (Legal Newsline)-Thirteen state attorneys general and the U.S. Department of Justice are suing to block a Brazilian company's planned acquisition of one of the largest meat-packing companies in the United States.

Officials filed a lawsuit Monday in U.S. District Court in Chicago to block JBS S.A. from acquiring National Beef Packing Co.

The Brazilian company is already in the process of acquiring Smithfield Beef.

The lawsuit alleges that the acquisition of National Beef by JBS would substantially lessen competition in violation of federal antitrust law.

Minnesota Attorney General Lori Swanson said a subsequent merger with National Beef Packing Co. would make JBS the largest beef packing company in the United States and give JBS approximately a third of the U.S. fed cattle processing market.

The plaintiffs contend that if the acquisition were allowed, JBS and the remaining two large beef processors -- Tyson and Cargill -- would control more than 80 percent of U.S. fed cattle processing capacity.

"Preserving competition among beef processors is important for both consumers and farmers," Swanson said. "Consolidation in the agricultural markets often comes at the expense of consumers and smaller farming operations, and the merger ought to be stopped."

Kansas Attorney General Steve Six said the deal threatens a multi-billion dollar industry in his state.

"The cattle industry is vitally important to the people of Kansas, contributing over $6 billion to the state economy last year," he said. "This deal threatens the vitality of this important industry. It would reduce the amount Kansas cattle producers get paid for their cattle, while at the same time increasing the amount Kansas consumers pay for their beef."

The lawsuit arose out of a joint investigation among the U.S. Department of Justice and the attorneys general of Minnesota, Colorado, Iowa, Kansas, Missouri, Montana, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, and Wyoming.

From Legal Newsline: Reach reporter Chris Rizo at

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