Group against sale of National Beef to Marfrig
May 8, 2018
by MEAT+POULTRY Staff
BILLINGS, Mont. – Reaction to the news of Marfrig Global Food’s acquisition of a 51 percent stake in Kansas City, Missouri-based National Beef Packing Co. LLC ranged from concern to outright opposition, with ranchers’ group R-CALF USA writing a letter to Trump Administration officials
urging them to block the transaction.
R-CALF believes Marfrig and JBS SA are attempting to gain control over the US beef packing industry. The group labeled the companies as “bad actors” that are controlled by the Brazilian government.
“It is evident that Marfrig and JBS are state-supported, cartel enterprises that are attempting to swallow up America’s critical food production facilities and gain control over America’s food production supply chain, particularly its live cattle supply chain,” according to the letter.
In April, officials from Marfrig reached an agreement with New York-based Leucadia National Corp. to acquire 51 percent of National Beef for $969 million. Leucadia, which acquired ownership interest in National Beef in 2011 and now owns a 79 percent interest in the company, will retain 31 percent of the company as a minority shareholder after the transaction is finalized. The acquisition would make Marfrig the second-largest beef processor in the world with additional access to National Beef’s 40 export markets, including Japan.
“Whereas the Trump Administration has determined China is threatening our economic and national security through theft of intellectual property, Brazil is similarly threatening our economic and national security by sending forth cartel partners that cheat cattle producers through anticompetitive buying practices and consumers through willful violations of basic food safety standards,” the group stated in the letter.
Federal lawmakers also are concerned about the impact of the Marfrig-National Beef deal on the security and safety of the US food supply chain given the recent allegations of corruption in Brazil that led to questionable food safety practices. A bipartisan group of US senators urged the Committee on Foreign Investment in the United States (CFIUS), to review and assess the ramifications of the deal.
“We are concerned that this proposed transaction comes following the 2017 corruption scandal in Brazil’s food safety system that revealed unacceptable safety and quality issues with Brazilian beef intended for the American market, including shipments from Marfrig,” the Senators wrote in a letter to CFIUS. “These issues ultimately resulted in the USDA’s Food Safety Inspection Service completely halting imports of fresh beef products from Brazil in June 2017.”
R-CALF also appealed to the CFIUS and the US Dept. of Justice to block the acquisition claiming that Marfrig “…demonstrates an unrepentant propensity for: i) exploiting cattle producers through anticompetitive buying practices; ii) exploiting consumers through the production and sales of unsafe beef; iii) violating basic food safety standards; and, iv) engaging in cartel behavior with JBS.”