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Brazilian Meatpacker JBS Making False Claims Washington, D.C. (October 22, 2008) – The claim by Brazilian-owned JBS SA (JBS) in response to the lawsuit filed Monday by the U.S. Department of Justice and 13 State Attorneys General to block the mega-merger between it and the nation’s fourth largest meatpacker – National Beef Packing Co. (National Beef) – is false according to R-CALF USA. In its “Notice to the Market” issued from Săo Paulo, Brazil, on Oct. 20, JBS states in regard to its proposed acquisition of National Beef, “…This transaction is highly pro-competitive and will generate significant efficiencies and synergies that will benefit our cattle suppliers and our beef customers…” “This statement is demonstrably false,” said R-CALF USA CEO Bill Bullard. “The transaction represents a buying-out of the competition, as both JBS and National Beef currently compete in the marketplace for both the purchase of live cattle from cattle producers and for the sale of beef to retailers, restaurants, and wholesalers. If this transaction were allowed, U.S. cattle producers would have only three remaining buyers for approximately 85 percent of all the slaughter-ready cattle they sell. Likewise, retailers, wholesalers and restaurants would have only three suppliers for approximately 85 percent of the beef they sell to consumers. There is nothing pro-competitive about eliminating competition in a marketplace that already contains too few participants.” R-CALF USA also takes exception to JBS’ claim that the merger would generate efficiencies and synergies that would benefit cattle producers and consumers. “Nothing could be further from the truth,” Bullard asserted. “The merger would have accorded JBS with tremendous market power, giving it dominant control over a marketplace that essentially would consist of only two other – and two smaller – market participants. This dominant market power would enable JBS to exploit both cattle producers and beef consumers. The public must not be misled by JBS’ attempt to convince cattle producers and beef consumers that ‘market power’ and ‘efficiencies’ are synonymous. “Moreover, the synergies that JBS is attempting to achieve amount to nothing more than a lessening of the forces in the marketplace that currently restrict the exercise of abusive market power,” he emphasized. “In free-market America, we call these forces ‘competition’ and we greatly appreciate the Justice Department’s and 13 State Attorneys General that have taken a strong stand to defend American competition.” Note: To view/download the JBS’ Oct. 20 statement, please visit the “Competition Issues” link at www.r-calfusa.com, or contact R-CALF USA Communications Coordinator Shae Dodson to request a copy. # # # R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALF USA represents thousands of U.S. cattle producers on trade and marketing issues. Members are located across 47 states and are primarily cow/calf operators, cattle backgrounders, and/or feedlot owners. R-CALF USA has dozens of affiliate organizations and various main-street businesses are associate members. R-CALF USA directors and committee chairs are extremely active unpaid volunteers. For more information, visit www.r-calfusa.com or, call 406-252-2516. |
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This page was last updated on Wednesday, December 24, 2008. |
