WASHINGTON – A food-safety group called a Chinese purchase of America’s largest pork producer “bad news for U.S. farmers and consumers” as opposition began building to the deal.
The buyout of Virginia-based Smithfield Foods by Shuanghui International Holdings — the biggest acquisition of an American firm by a Chinese company — “tightens the grip of multinational agribusinesses,” said Wenonah Hauter, executive director of Food & Water Watch.
“While it’s making business news headlines, U.S. consumers will likely not take notice of the change, but it will show up on their plates in the form of farmer exploitation, more factory farms and a more complicated supply chain that leaves consumers at higher risk of food contamination,” Hauter said in a statement Thursday, a day after the $5.1 billion deal was announced.
Noting that Smithfield owns more hogs than the next eight largest hog producers combined, Hauter said the company “has a growing stranglehold over U.S. farmers, who have fewer options for selling their hogs at the market.”
China, the world’s No. 1 pork consumer, has been looking to expand its hog holdings. While Smithfield’s stock jumped 20 percent on news of its intended purchase, environmental groups see little upside.
Shuanghui has been the target of allegations that some of its pigs are fed with clenbuterol hydrochloride, a toxic additive that produces leaner meat.
“China scares the daylights of out us,” said Rick Dove, of the Water Keepers Alliance in North Carolina, a group that has sued hog producers in environmental disputes.
“We’ll get spin about production going up. But if you take a look at the record of Chinese companies, they are environmentally challenged.”
The Shuanghui-Smithfield deal requires approval of the U.S. Committee on Foreign Investment, which reviews foreign acquisitions for national-security implications.
“To have a Chinese food company controlling a major U.S. meat supplier, without shareholder accountability, is a bit concerning,” Sen. Charles Grassley, R-Iowa, said in a statement.
He calls CFIUS scrutiny “vitally important.”
“How might this deal impact our national security? What role does the Chinese government play in Shuanghui, like it does in so many other ‘private’ companies? These are important questions for CFIUS to get answered.”