Grassley sent his letter to the Justice Department's new Assistant Attorney General even though the department has indicated that it won't reopen its anti-trust review in this case following the recent court ruling which prompted merger talks between Tyson and IBP to continue.
"I remain seriously concerned about the impact of this merger on the farm community," Grassley said. "A combined IBP-Tyson presence will limit the ability of family farmers and independent producers to obtain fair prices for their products, and it will negatively affect product choice and the prices consumers pay at the retail meat counter. If this merger actually happens, I want the Justice Department to carefully monitor the merger and take any appropriate action if there are unintended consequences.
Last month, Grassley introduced legislation ? the Agriculture Competition Enhancement Act ? to change the merger review process of the Justice Department as it pertains to agribusiness and enhance the Agriculture Department's ability to address anti-competitive activity in the industry. Grassley first introduced this measure last year. It was not acted on during the last Congress. Grassley said he put the bill back on the table to jump-start a debate on how to respond to the concentration issue.
"I hope lawmakers can work constructively and achieve a bipartisan consensus on legislation this year. I'm committed to making sure family farmers have fair access to the marketplace. A level playing field is the best way to keep our economy strong, the agricultural community vibrant and competitive, and consumers satisfied," he said.
In recent years, Grassley has led a number of initiatives dealing with increased concentration in agriculture. He is the co-author of legislation to restrict packer ownership of livestock. Last year, the President signed a Grassley-sponsored bill to require the Agriculture Department to dramatically improve its enforcement of the Packers and Stockyards Act. Grassley has also petitioned federal regulators to more carefully review agribusiness mergers to ensure competition.
A copy of Grassley's letter to Assistant Attorney General Charles James follows.
July 2, 2001
Assistant Attorney General Charles James
U.S. Department of Justice, Antitrust Division
950 Pennsylvania Avenue, N.W.
Washington, DC 20530
Dear Assistant Attorney General James:
I am writing to reiterate my concerns about the proposed merger between Tyson Foods, Inc. and IBP, Inc. in the wake of the Delaware court ruling that Tyson improperly broke off merger discussions this past March. Tyson and IBP subsequently have resumed their merger discussions. While I understand that the Justice Department will not reopen its antitrust review, I nevertheless remain seriously concerned about the impact of this merger on the farm community. I believe that this transaction will significantly reduce market opportunities and increase the potential for anti-competitive activity. I also believe that a combined IBP-Tyson presence will adversely impact the ability of family farmers and independent producers to obtain fair prices for their products, and will negatively affect product choice and the prices consumers pay at the retail meat counter.
As such, if the merger between Tyson and IBP is eventually consummated, I urge the Justice Department to carefully monitor whether the merger has any unintended consequences affecting competition in the poultry, cattle and hog markets and, if it does, to take appropriate action. In addition, the Antitrust Division may want to carefully review the Department of Agriculture's report Assessment of the Cattle and Hog Industries, Calender Year 2000, recently issued by USDA's Grain Inspection, Packers and Stockyards Administration, as the Justice Department evaluates market conditions and competition issues in the overall meat industry.
In addition, I have introduced legislation which would change the antitrust review process for mergers in agriculture. As you know, the interaction between large, conglomerate buyers and small, family farmer sellers poses antitrust challenges that are unique to the agriculture industry. In order to address these unique challenges, I recently reintroduced S. 1076, the "Agriculture Competition Enhancement Act." My bill would expand and enhance the role that the Agriculture Department plays in the antitrust review of ag mergers by formally integrating USDA in the merger review process. This approach will help ensure that farmers' concerns and needs are fully discussed when federal agencies examine proposed agricultural sector transactions. Family farmers and independent producers should be able to compete on a level playing field and not be left defenseless in a market dominated by corporate interests.
I hope that we can work together to address the concerns of our nation's family farmers and independent producers. By guaranteeing inclusion and openness, we can go a long way toward alleviating the farm community's anxiety about an increasingly concentrated industry. I welcome your comments and suggestions as Congress proceeds to work on legislation dealing with competition matters in the agriculture industry.
Sincerely,
Charles E. Grassley
United States Senate