Senator To Justice Department: Say No To JBS Merger

JBS-Swift & Co.’s proposed acquisitions of Smithfield Beef Group and National Beef Packing Co. should not be allowed, the chairman of the U.S. Senate’s antitrust subcommittee says.

Sen. Herbert Kohl (D-Wis.) sent a letter Tuesday to the Justice Department urging it to block the deals because it would give three U.S. beef packers more than 80 percent control of the market and reduce competition.

“By reducing the number of major buyers for ranchers’ cattle from five to three — and in some regions even one or two — this deal will give the remaining beef processors enormous buying power,” Kohl wrote. “With little choice to whom to sell their cattle, ranchers will increasingly be left in a ‘take it or leave it’ position.”

Kohl said that if the government opts to allow the JBS deals, it should at least force the company to divest Five Rivers Ranch Cattle Feeding LLC, a part of the Smithfield package.

Kohl’s statement comes at the conclusion of his committee’s review of the pending transactions, which included a hearing in May. (See JBS-Swift makes its case at Senate hearing on Meatingplace.com, May 8, 2008.)

The Justice Department has declined to comment on pending cases.