Smithfield Foods CEO Larry Pope to address U.S. lawmakers about merger with China's Shuanghui International. (Photo: Steve Helber, AP)
WASHINGTON - The top executive from pork giant Smithfield Foods will tell lawmakers on the Senate Agriculture Committee Wednesday that the $4.7 billion purchase of the company by China's largest meat producer does not pose a risk to the safety of U.S. food and will have no impact on the country's food supply.
Lawmakers have worried that the takeover of Smithfield, the world's largest pork processor and hog producer, by Shuanghui International Holdings would squeeze the country's supply of pork if more of it was being exported and leave U.S. meat susceptible to food safety concerns that have plagued Chinese companies including Shuanghui in recent years. Critics of the deal have called for a more thorough review by U.S. regulators.
'Our combined company . . . has every incentive to ensure the continued safety and excellence of our products and brands,' Larry Pope, the chief executive of Virginia-based Smithfield Foods, said in prepared remarks to the Senate panel. 'Absolutely nothing about how our products are made, inspected or distributed will change.'
Smithfield, founded in 1936, sells packaged products under popular brands including its own name as well as Farmland, Armour and Cook's. The pork producer employs more than 46,000 people in four countries and 25 states, including Iowa and South Dakota.
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Pope said in his prepared testimony the transaction isn't about importing Chinese pork into the United States. Instead, he said, it would open up the market for U.S. pork farmers by giving them more access to Shuanghui's large distribution system and millions of meat-hungry consumers in China, South Korea, Japan and other Asian countries.
Smithfield has stressed repeatedly that the merged company would keep Smithfield's current management and facilities in place and maintain existing relationships with U.S. pork producers. Pope reiterated those comments again Wednesday.
'In short, this partnership for growth is good for our business, and for the producers and suppliers with whom we work,' said Pope. 'US pork producers and processors are the best and most efficient in the world, and that competitive advantage will not be upended, but rather enhanced, by this merger.'
The deal, which would be the largest takeover of a U.S. company by a Chinese firm, is expected to close later this year. Shareholders and regulators, including the U.S. Committee on Foreign Investment that reviews deals for their impact on national security, must first approve the deal.
Sen. Debbie Stabenow, D-Mich., the chairwoman of the Senate Agriculture Committee, and other lawmakers have called for the CFIUS review of the Smithfield deal to include the Agriculture Department and the Food and Drug Administration.
The proposed takeover of Smithfield has stoked growing concern over an influx of foreign investment in the United States. Many expect cash-rich China to be an active player in the future, much to the dismay of Washington lawmakers reluctant to cede control of U.S.-owned businesses to the communist country.
'I think it is reasonable for you to expect a wave of Chinese investments into our food and agriculture industry and this potential purchase is not a one off,' said Daniel Slane, a member of the US-China Economic and Security Review Commission, a government agency that monitors trade and economic relationships between the two countries. 'Today it's Smithfield, but tomorrow it could be Consolidated Grain, ConAgra or Tyson Foods,' he said in testimony submitted to the Senate Agriculture Committee.