C. Larry Pope, president and CEO of Smithfield Foods Inc., testified before the United States Senate Committee on Agriculture, Nutrition and Forestry to review the benefits of the Shuanghui-Smithfield transaction for U.S. farmers and agriculture, while reaffirming the commitment to upholding the highest food safety standards. Pope explained the combined company's commitment to continuing to work with American producers and suppliers that have played an integral role in Smithfield's success:
"With respect to agriculture, we expect this transaction to drive growth and expansion not only for our growers, but for the entire U.S. pork industry,” he said in prepared testimony. “Smithfield Foods owns over 400 hog farms and has contracts with more than 2,000 family farmers across the country. Our agreement with Shuanghui will maintain all of these contracts and arrangements. Moreover, this transaction creates a terrific opportunity through growth in exports for U.S. hog farmers to expand production to meet the growing Chinese demand."
Pope pointed to the combined company's commitment to food safety as the highest priority:
"The integrity of our brands, our record of safety, the safety of the U.S. food supply chain and the recognized effectiveness of U.S. food safety standards are key drivers of the value that Shuanghui places on Smithfield. Our brands are recognized as representing highest-quality, safe and sought-after products throughout the world, including in China. Our combined company thus has every incentive to ensure the continued safety and excellence of our products and brands.
“Smithfield's facilities will continue to maintain their quality and will experience the same rigorous level of USDA FSIS inspection, regardless of the ownership of this company. Absolutely nothing about how our products are made, inspected or distributed will change."
Pope also emphasized Shuanghui's commitment to maintaining Smithfield's operations, staff and management:
"Shuanghui intends to retain Smithfield's management team, its plants and its employees. Shuanghui recognizes Smithfield's best-in-class operations, outstanding food safety practices and 46,000 hard-working employees. There should be no noticeable impact on how we do business operationally in America and around the world as a result of this transaction, except that we will do more of it."
Pope told lawmakers yesterday that the acquisition, when completed, would not result in any pork from China being imported into the United States.
"This is about exporting meat products from the U.S. to China," he said.
Other witnesses raised concerns, reports CNN. The proposed takeover of Smithfield could have major implications for the U.S., said Daniel Slane, commissioner of the U.S.-China Economic and Security Review Commission, in prepared remarks.
"Shuanghui is not investing in just any U.S. meat company," he said. Smithfield leads the U.S. pork market, has 25 U.S. plants and employs 46,000 workers, Slane testified. Owning it would give Shuanghui access to technology and intellectual property that could put America's hog industry at a disadvantage domestically and overseas.
A coalition of farm groups le dby R-CALF USA also sent a letter to nine of President Obama’s cabinet members, urging them to reject the proposed sale.
The groups wrote that the proposed sale "poses an unacceptable national security risk, undermines the safety and security of the U.S. food supply, threatens the environment and economy of rural communities, provides significant taxpayer-financed technology and intellectual property to foreign competitors and will raise the cost of food for American consumers."
According to the Foreign Investment and National Security Act of 2007, the U.S. can reject an acquisition of a U.S.-based business by foreign investors if the sale would potentially disrupt the critical infrastructure of the United States.
The group's letter suggests the acquisition would do just that, disrupting the U.S. food supply, agriculture land and rural economies. In addition, the groups argue the proposed sale would have a debilitating impact on national security.
"In the simplest terms, Smithfield is a significant supplier of pork products to U.S. military installations. If the merger were approved by CFIUS, the Chinese-owned Smithfield would control a portion of the food supplied to U.S. troops," the letter states.
The prepared testimony for Pope is available on the Investors and Media sections of www.smithfieldfoods.com. More information about Shuanghui International is available at www.shuanghui-international.com.
Outside of Washington, the leadership of the N.C. Department of Agriculture and Consumer Services (NCDA&CS) and North Carolina Pork Council (NCPC) commented about their delegation's recent meeting with Shuanghui's leadership in China.
The meeting was part of a week-long mission led by the NCDA&CS international marketing team to strengthen existing business relationships between China and North Carolina. The meeting with Shuanghui included a tour of the company's Industrial Park in Luohe as well as a meeting with Chairman Wan Long. In the meeting, Chairman Wan reaffirmed his commitment to maintaining Smithfield's management team, operations and employment agreements as well as upholding the company's industry-leading safety standards and significant philanthropic efforts.
Advised of the results of the meeting, N.C. Agriculture Commissioner Steve Troxler said, "It is nice to hear of Shuanghui's support of Smithfield's existing structure. I'm sure chairman Wan's comments will be welcomed by the thousands of North Carolinians whose livelihoods depend on Smithfield."
Additionally, NCPC Chief Executive Officer Deborah Johnson said, "We anticipate that the acquisition of Smithfield will lead to expanded overseas sales and more opportunities for the thousands of North Carolinians who work in the pork production chain."
Source: Smithfield Foods Inc., CNN, R-CALF USA, N.C. Pork Council