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NFU Coalition Fears JBS Beef Merger

27 December 2012

US - The US National Farmers Union and more than 40 farming, rural and agricultural organisations have sent a letter to the US Department of Justice (DOJ) calling for an expanded investigation into a proposal made by food processing company JBS USA to acquire two US-based beef packing plants owned by Canadian-based XL Four Star Beef.

The coalition is concerned that the takeover will reduce competition in the sector.

"We firmly believe that this proposed merger would reduce competition and seriously harm both cattle producers and consumers," the letter states.

"We therefore request that no early termination of the antitrust evaluation regarding the acquisition of the two US-based beef packing plants be granted and that the Justice Department make a second request for information to extend the investigation."

In 2008, the DOJ initiated antitrust enforcement action that prevented JBS USA from acquiring National Beef Packing Company, the fourth largest beef packer in the US.

"The Justice Department must not retreat from the historically significant effort it started in 2008 to curb the pervasive erosion of competition in both the US cattle market and the consumers' beef market," the letter says.

In its letter, the group urges the DOJ to initiate an extension of the merger waiting period to provide additional time for review of the merger, as well as requesting further information including cattle procurement practices, competition levels and the history of JBS's previous acquisitions of closed packing plants.


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