Sen. Chuck Grassley issued the following comment today regarding an offer by Smithfield Foods Inc. to acquire IBP Inc.
"I'm very concerned about this development, and I'll be working to ensure vigorous scrutiny of the proposed deal by the regulatory bodies. The government has a responsibility to understand the ramifications of this proposed acquisition and any further concentration in agriculture to ensure competition for the independent producers who get caught in the middle. Agribusiness, especially in the meatpacking industry, has become so concentrated that family farmers often question whether they can get a fair price for their products. They wonder if big companies compete unfairly and engage in predatory business practices."
On October 3, Sen. Grassley wrote a letter to the Justice Department and Federal Trade Commission asking for careful consideration of a bid by Donaldson, Lufkin & Jenrette/Rawhide Holdings Corp. for IBP. News reports had indicated that one of the world's largest feed producers, Archer Daniels Midland Co. was a primary investor in the deal. ADM holds approximately a 12 percent interest in IBP.
Sen. Grassley is the author of several legislative proposals to address competition in the agriculture sector. One of his initiatives would give new authority to the Agriculture Department to challenge agribusiness mergers. Another Grassley bill would require the Agriculture Department to dramatically improve its administration so it can better enforce the Packers and Stockyards Act. This legislation was included in the Grain Standards Act reauthorization, which awaits the President's signature. Sen. Grassley is also a principal cosponsor of legislation to restrict packer ownership of livestock. In addition, Sen. Grassley has aggressively sought to have federal regulators more carefully review agribusiness mergers to ensure competition.
Sen. Grassley is a senior member of the Judiciary Committee.