AGs sue to block controversial meatpacking deal

Chris Rizo Oct. 21, 2008, 7:00am


AUSTIN-Greg Abbott and a group of other state attorneys general are suing to block a Brazilian company's planned acquisition of one of the largest meat-packing companies in the United States.

Officials filed a lawsuit Monday in U.S. District Court in Chicago to block JBS S.A. from acquiring National Beef Packing Co. The Brazilian company is already in the process of acquiring Smithfield Beef.

The lawsuit alleges that the acquisition of National Beef by JBS would substantially lessen competition in violation of federal antitrust law.

The plaintiffs contend specifically that if the acquisition were allowed, JBS and the remaining two large beef processors -- Tyson and Cargill -- would control more than 80 percent of U.S. fed cattle processing capacity.

"Texas must continue to foster a vibrant, competitive, free market economy," Abbott said. "After months of negotiations and careful review, we are concerned that the proposed merger will harm ranchers and feed lots in Texas, which is the nation's number one beef producer. Today's legal action reflects an effort to ensure that competition thrives in an industry that annually contributes $5 billion to the Texas economy."

Kansas Attorney General Steve Six said the deal too threatens a multi-billion dollar industry in his state.

"The cattle industry is vitally important to the people of Kansas, contributing over $6 billion to the state economy last year," he said. "This deal threatens the vitality of this important industry. It would reduce the amount Kansas cattle producers get paid for their cattle, while at the same time increasing the amount Kansas consumers pay for their beef."

The lawsuit arose out of a joint investigation among the U.S. Department of Justice and the attorneys general of Minnesota, Colorado, Iowa, Kansas, Missouri, Montana, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, and Wyoming.

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