by Marion Nestle
May 30 2013

Chinese buy Smithfield: What about food safety, the environment, community health, animal welfare, worker rights?

I first heard about the impending of Smithfield (the gigantic ham-and-pork company) to the Chinese company, Shuanghui International Holdings, from MeatPoultry.com:

The acquisition positions Smithfield to expand its offerings in China through Shuanghui’s distribution network. Shuanghui will acquire all of Smithfield’s outstanding shares for $34 per share in cash, which is a 31 percent premium…Smithfield’s stock price rose nearly 28 percent to $33.20…Smithfield’s common stock will no longer be publicly traded, and the company will become a wholly owned independent subsidiary of Shuanghui.

MeatPoultry.com also reported a statement from the CEO of Shuanghui: 

We are excited about this…Together, [Shuanghui and Smithfield Foods] can be a global leader in animal protein…We are No. 1 in China; Smithfield is No. 1 in the US…Chinese consumers like American pork. US farmers want foreign markets for their pork. This will be a win-win for both countries.

Not exactly, says a e-mailed news release from the Waterkeeper Alliance:

This deal with the Shuanghui – a company with a very recent history of producing tainted food – raises the specter that Americans will lose more control of their food supply, be exposed to tainted food and be left with even more devastated farming communities and drinking water supplies as a result of increased industrialized meat production.

The New York Times put this sale on the front page and Stephanie Strom has an even longer piece on it in the business section.   The Washington Post also had plenty to say.

Smithfield, you may recall, is a company famous for factory farms, pollution, and truly appalling labor practices documented, in among many other places, the movie, Food, Inc.

In 2009, I commented on a previous attempt by Smithfield to sell out to a Chinese company.

Let’s not be too xenophobic about China. China already owns vast amounts of American real estate, holds vast amounts of American debt, and produces vast amounts of the food we eat–globalization in all its glory. We can no longer survive without China so we better figure out quickly how to make this marriage work.

We also better figure out how to make our food production system more sustainable and less harmful to farm animals, the environment, farm workers, and consumers. I was a member of the Pew Commission on Industrial Farm Animal Production, which released its report last April. Our report fully documented how CAFOs (confined animal feeding operations) are not nice to animals; pollute air, soil, and water; turn communities into garbage dumps; and promote transmission of nasty—and often antibiotic resistant–microbial diseases to farm workers, community residents, and everyone else.

One major finding of the Pew Commission was that laws protecting communities and the environment currently exist; they just aren’t enforced.  Too bad for anyone living near an industrial pig farm.

This deal stinks?

Additions, May 31: Reuters discusses the ractopamine issue, said to be key to understanding this deal.  The Chinese do not allow use of ractopamine as a growth promoter, but the U.S. does.  Once Smithfield started phasing out its use, the deal became possible.

Ractopamine is a beta-agonist. Initially developed to treat asthma in humans, ractopamine was found to be extremely effective at changing the metabolism of an animal, so that the animal would quickly and cost-effectively add sought-after muscle. The FDA approved the use of beta-agonists in pigs in 1999, for cattle in 2003 and for turkeys in 2008.

Helena Bottemiller writing on NBC News, also discusses this issue.

In March, Smithfield Inc., converted its Tar Heel, N.C. plant – the world’s largest pork processing facility – to slaughter only hogs that were raised without the use of ractopamine….the company’s product line will be 50 percent ractopamine-free as of June 1…Earlier this year, China and Russia demanded that all American meat exports be certified ractopamine-free. The U.S. government initially refused these certification demands, so Russia shut down its market to U.S. beef and pork in February. 

Addition, June 1: The New York Times writes that the Committee on Foreign Investment is about to undertake a national security review of the deal.  The big questions: Are Smithfield’s sales to the military secure?  Does it use special farming technology that could be transferred to China?  Will Shuanghui have the power to disrupt the U.S. food chain for pork?

Another addition, June 1: Apparently, Shuanghui has a history of findings of maggots, excessive bacteria and illegal additives.

Addition, June 4: Guess who owns half of Shuanghui, the company that wants to buy Smithfield: Goldman Sachs, among others.

Addition, June 5: The Wall Street Journal has this helpful graphic comparing the pork supply chains in China and the U.S. along with an excellent summary of the issues involved.

image

  • http://www.101Incredible.com Ken Leebow

    This doesn’t sound kosher to me.

  • http://www.101Incredible.com Ken Leebow

    Wow: This doesn’t sound kosher to me.

  • pawpaw

    Shorten our supply lines, that’s how we can respond to food globalization. At the farmers market where we sell and others we frequent, there are several pork producers at each. Buy from those who grow it!

  • Pingback: Tom Douglas » Blog Archive » Heirloom Jewels, China Wants Our Pigs, Beehive to Plate Dining()

  • B.

    I stopped buying Smithfield products at the start of their labor problems several years and this is just one more reason to continue my boycott!

  • FarmerJane

    This deal sounds like the largest ever transfer of livestock to a private firm. Ag papers are saying that Smithfield itself directly owns some 1.09 million sows. Additionally, a substantial percentage of pork is produced by independent farmers who produce under contract terms set by Smithfield. A USDA report stated that US farmers intend to farrow out some 2.88 million sows in 2013. Total breeding stock is around 5 million.

    Agricultural economics professors in ag schools are calling this a fundamental turning point in the globalization of pork.

    Interesting to note that while Smithfield shareholders (whoever they are…one website listed TIACREFF as a shareholder along with other institutional investors) will be getting a 30% premium for their stock. Its been generally known among farmers that pork farmers lost money in 2012…An online pork farmers newsletter called Sterling Pork Profit Trader summarized the losses that were at shocking levels. Of course, ever optimistic, pork farmers are hoping to hit break even in 2013.

    I am glad you did a story on this. It seems so many in the food movement spend a lot of time waxing about their farmers market and excoriating farmers who fail to meet even one of the food movement “litmus tests.” In the meantime, fundamental and massive structural changes are being worked in how our food is produced and moved.

  • greensleeves

    @FarmerJane

    “It seems so many in the food movement spend a lot of time waxing about their farmers market and excoriating farmers who fail to meet even one of the food movement “litmus tests.”

    Always first to blame the consumer, aren’t you FarmerJane? I’m not sure that you’re aware what a terrible spokesperson you are for your stated position. Your comments are always that consumers suck & government subsidies are your inalienable due.

    Yeah, if you as a farmer prostitute yourself to the Chinese, torture your animals, and then beg the government for a subsidy to cover your bad decisions, you sure bet I’m going to “excoriate” you.

    Or you can accept the disruption caused by global shifts, see that the organic consumers you love to hate are in fact your salvation, and change your business model accordingly. Oh wait – that would require effort on your part, not just sucking from the government benefit teat.

    FarmerJane, take your farm organic, sell cow- & milk-shares in a CSA & free yourself from the global market, which seeks to grind you into dust. Instead embrace the consumers like myself who are willing to pay 3x as much for organic grass-fed pasture-raised certified humane products. Try working with me & my open wallet instead of kicking my shins like a child.

    Tough love, FarmerJane, but best wishes that you someday see the light.

  • http://www.enviroequipment.com/blog/ EEI Blog

    First of all, we write about the environment on a regular basis and I can tell you that one shouldn’t take seriously anything said by Waterkeeper Alliance because they used to be an organization devoted to keeping our drinking water clean but in recent years they have branched off into rather extremist environmental positions.

    Second, you should have your head examined if you continue to buy anything from Smithfield, as the PEW report outlines exactly how toxic their products are.

    Lastly, I am convinced thata lot of the anti-Shuanghui-buying-out-Smithfield sentiment is nothing but knee-jerk racism against the Chinese. Don’t mistake the atrocious environmental record of the Chinese government with that of privately held Chinese companies because the two are vastly different as the former is only now waking up to the fact that the country is a toxic dumping ground while the latter is part of the growing movement to change its environmental record so it’s more aligned with Western standards.

  • http://un-thought.blogspot.com/ Floccina

    Chinese by
    Shouldn’t you say “Shuanghui International Holdings buys”? All Chinese companies are not the same nor are Chinese people the same.

  • http://www.pregnancymiraclereviewcenter.com Mary

    I have also stopped buying smithfield products. Great info, wish more people knew this.

  • http://www.fakefoodwatch.com/ Deborah White

    Legitimate American fears of the sale of Smithfield to Shuanghui International are many, and include:

    *Importation of low-grade Chinese pork into U.S. markets

    *Implementation of lower-quality Chinese pork producing practices in U.S. plants and farms

    *Deterioration of Smithfield quality standards, as Chinese owners cut corners and cranks-up volume to meet Chinese pork demands

    *New scarcity of pork in the U.S., leading to price increases

    In other words, the sale of Smithfield to Schuanghui, the largest Chinese purchase ever of any American company, could likely result in lower-quality, higher prices and less availability of pork and pork products for American consumers.

    The Chinese meat industry, and especially pork producers, is credibly reputed for its disgustingly poor record of food safety and counterfeit products.

    Outside of millions in bonuses to top Smithfield executives, I just don’t see how this mega-deal benefits the U.S. or Americans.

    I blogged about this more at http://www.fakefoodwatch.com/2013/06/smithfield-sale-to-chinese-could-herald.html.

  • Pingback: Negociados que Atentan contra Seguridad Alimentaria, Medio Ambiente, Bienestar Animal, Derechos Laborales y Más | AnaMariaQuispe's Blog()