In Smithfield, Va., on Wednesday, locals were shocked to discover that their town’s namesake, Smithfield Foods, founded in 1936 as a single meatpacking plant and now the largest pork producer in the world, is poised to be sold to Chinese meat company Shuanghui International. If approved by federal regulators, the $4.7 billion deal would be the biggest takeover in history of an American company by a Chinese one.
The announcement of the deal immediately provoked skepticism far beyond the town of Smithfield, with a wide range of camps voicing concern about everything from food safety to foreign financial control to increasing corporate consolidation of the food industry. Shuanghui is the biggest meat company in China, and Smithfield already owns more hogs than the next eight largest hog producers combined, according to Food & Water Watch. It’s not necessarily a complete foreign takeover if you consider that Shuanghui is partially owned by Goldman Sachs, but if you’re worried about corporate control of the food system, that’s not exactly cause for comfort.
Why is China interested in owning an American pork behemoth? The New York Times reports:
Smithfield and Shuanghui said that the deal was meant to … increase exports of American products to China, already the nation’s third-largest export market for pork. Meat consumption in China has exploded over the past decade because of a growing middle class and a shift in diet from rice and vegetables to more protein.
China has attempted to meet that rising demand for a middle-class diet by revamping its meat-production system to look more like the industrial one dominant in the U.S. and exemplified by Smithfield. Large, vertically integrated agribusiness operations, supported by policy and investment, increasingly challenge the survival of small-scale Chinese farms, according to a 2011 paper from the Institute for Agriculture and Trade Policy.
The shift toward industrial agriculture, while successfully ramping up Chinese pork production, has also led to food-safety scandals that have American consumer groups worried about the possibility of China exporting its pork to the U.S., despite the deal’s stated goal of doing the opposite. In 2011, Shuanghui came under fire for selling pork tainted with clenbuterol, an additive banned in the U.S., E.U., and China itself for its serious human health risks. And then there was that whole problem of Chinese hog farmers dumping thousands of dead pigs in a river.
But it’s not like U.S.-produced pork has a stellar safety record. A report earlier this month from the U.S. Department of Agriculture’s Office of the Inspector General slammed slaughterhouses here for “egregious” safety violations; it found that producers often committed the same human-health and animal-welfare errors over and over without consequence. And American pork producers, including Smithfield, have faced criticism for their use of ractopamine, an additive similar to clenbuterol that’s banned in China but not here. According to Reuters, Smithfield has been trying to phase out the drug; the deal with a Chinese company could speed up that process.
The Committee on Foreign Investment in the United States, a panel that clears such deals for national security, must review the deal before it can go ahead. Tom Philpott at Mother Jones has this take:
For Smithfield itself, the deal is savvy, because Americans are eating less meat. In order to maintain endless profit growth, the company needs to conquer markets where per capita meat consumption is growing fast, and the China market itself represents the globe’s biggest prize in that regard.
Hmm. Reminds me of U.S. attempts to export another product unwanted by Americans but in high demand in China. Starts with c, rhymes with bowl.