Chinese acquisition of Smithfield Foods continues to raise concerns

Economics
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Sen. Elizabeth Warren

The controversial acquisition of Virginia-based Smithfield Foods by W.H. Group (a Chinese-owned corporation) continues to bring controversy, more than six years after the deal went through, particularly as North Carolina residents raise their voices about the effects of hog farms  in the state – especially those operated by Smithfield Foods and its subsidiary in the Tar Heel State, Murphy-Brown.

Smithfield Foods and Murphy-Brown have been ordered to pay more than a half-billion dollars in damages from federal nuisance lawsuits filed in North Carolina. Legislators have pushed for the federal government to ensure that foreign-owned companies (like W.H. Foods)  do not receive funding from bailouts related to the trade wars and economic uncertainty.

One of those decisions against Smithfield Foods and Murphy-Brown was a $50 million ruling in Joyce McKiver, et al. v. Murphy-Brown LLC.,  that agricultural groups appealed. In a friend of the court brief, these groups question whether the farmers involved would be able to continue with their livelihoods if the decision were upheld.

These types of questions were relevant in 2013, when Rep. Rosa DeLauro (D-Conn.) and Sen. Elizabeth Warren (D-Mass.) wrote to the Obama administration, and they’re still relevant.

In 2013, DeLauro and Warren demanded answers before the Chinese company acquired Smithfield Foods, with DeLauro saying the deal should be carefully scrutinized.  In a letter to top members of the Obama administration, DeLauro and Warrant wrote: 

“The proposed Shuanghui acquisition of Smithfield Foods is a highly consequential merger of two large food producers that warrants careful scrutiny by regulators. As regulators responsible for promoting free and fair competition in the marketplace, ensuring strong intellectual property laws and effective enforcement, reviewing foreign acquisitions of U.S. companies, and protecting the safety of our food supply, we believe your views on key issues related to this proposed merger are critical.”

DeLauro has not responded to comments for comment on the current situation with W.H. Foods in North Carolina. She is known for her advocacy related to the safety and affordability of the U.S. food supply for consumers. She formerly served as the chair of the subcommittee responsible for funding the Agriculture Department.

The letter from DeLauro and Warren pointed out their concerns about the deal, ranging from food safety to consolidation in the agricultural industry, questions about the  new ownership and a Chinese company getting access to the U.S. market, while the U.S. has been unable to gain access to the Chinese market, among other concerns. They also question whether Americans would be able to differentiate between Chinese pork products and the pork produced in the U.S. hog farms

“We believe the potential impact on U.S. global competitiveness and U.S. food safety and security of this proposed acquisition are national security considerations," the women wrote. "Regardless, we believe your answers to our questions are critical to shedding light on the numerous ramifications the deal may have on American consumers and the country at large.” 

Their concerns remain valid, after U.S. farmers have been hit with tariffs from the Chinese government, amounting to more than $100 billion.  

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