US-based Smithfield Foods raises around 15 million pigs a year and processes 27 million, producing over six billion pounds of pork. In May 2012, Chinese meat company Shuanghui International made a US$4.7 billion offer for the company.
US senators want security probe over pork takeover
A group of 15 US senators from both the Republican and Democratic parties has urged the Obama administration to consider whether the proposed sale of Smithfield Foods to the Chinese meat company Shuanghui International posed a threat to the US food supply that could justify blocking the deal.
"We believe that our food supply is critical infrastructure that should be included in any reasonable person's definition of national security," the senators said in a letter to treasury secretary Jack Lew, whose department chairs the interagency panel that reviews foreign investment for national security threats.
Smithfield, based in Virginia, is the world's largest producer and processor of pork. Shuanghui is planning to acquire it for US$4.7 billion in what would be the biggest takeover of a US company by a Chinese firm.
"We strongly encourage you to include the Department of Agriculture and the Food and Drug Administration in any CFIUS [Committee on Foreign Investment in the United States] review of this transaction," the senators said.
The group included 15 of the 20 members of the Senate Agriculture Committee, including the Democratic chairman, Debbie Stabenow, and the panel's top Republican, Thad Cochran.
They said the agriculture committee had not taken a formal position on the proposed sale but planned to "further examine how this transaction is reviewed and how these transactions will be reviewed in the future," given the potential for other foreign purchases of US food assets.
Senate Minority Leader Mitch McConnell, a Republican, and Senate Finance Committee chairman Max Baucus, a Democrat, were among the five Agriculture Committee members who did not sign the letter.
The Committee on Foreign Investment review process does not typically include either the Department of Agriculture or Food and Drug Administration, although the statute allows the president to bring in additional agencies on a case-by-case basis.
In addition to the Treasury, other Committee on Foreign Investment members include the Departments of Justice, Homeland, Security, Commerce, Defence, State and Energy as well as the offices of the US Trade Representative and Science and Technology Policy.
The senators urged Lew to make the Department of Agriculture one of the lead agencies in the Smithfield review and to consider "the broader issues of food security, food safety and biosecurity" posed by the takeover.
They also suggested the US government should require certain safeguards, if the deal was approved, to ensure Shuanghui complied with US food safety and biosecurity standards.
Smithfield said: "We welcome a full review and fair consideration of the Shuanghui-Smithfield combination from the US government."