Saturday, 21 February 2009

JBS has abandoned its bid to take over National Beef Packing Co.

The world’s largest beef producer and packer, Brazilian-based JBS-Swift, announced it was abandoning its attempted takeover of the National Beef Packing Company. Last year JBS-Swift purchased Smithfield Foods’ beef business as well as majority shares in Italian and Australian beef companies. It had been in talks with the US Department of Justice trying to gain approval of its next takeover target, but now appears to be backing out. According to the Reuters article, JBS abandoned the takeover due to a “lack of satisfactory conditions.”

Since March 2008, the Organization for Competitive Markets (OCM)has aggressively opposed the JBS/National Beef merger on the grounds that it would exacerbate the distortions already evidenced in the U.S. cattle market and would strengthen JBS’ ability to use packer-owned cattle and other forms of captive supplies to manipulate prices paid to hundreds of thousands of independent cattle producers.

My, July 14, 2008 Epicurean Ideal post called "Meat conglomerates" showed my home-made graphic of the market hold that JBS would have potentially held had the merger had taken place.

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