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Smithfield Deal Could Leave Americans Holding the Bag

By Elisabeth Holmes, Staff Attorney

June 07, 2013
Center for Food Safety

As Center for Food Safety suspected, there is nothing from Smithfield to confirm that its “ractopamine-free” claim will benefit Americans, at least those that do not hold an ownership interest in the corporation.  Last week Smithfield announced it has negotiated for Chinese food conglomerate Shuanghui to acquire the American pork producer.  The U.S. Committee on Foreign Investment (CFIUS) must still review the deal, with an eye towards any threats to national security posed by the transaction, but word on the street is that the deal will sail through the committee.  It is now abundantly clear that Smithfield’s ractopamine announcement was intended to boost its share price prior to sale,[1] not to provide American consumers with a healthier food product. 

Just how could this deal work, and why are we making a stink about it?  If Shuanghui’s acquisition is approved by CFIUS, tens of millions of pigs raised in the U.S. will be sold to American and Chinese consumers.  If China’s demand increases, as it is expected to do, pork production in the U.S. will rise and exports to China will jump.  However, the external costs of production will remain on U.S. soil.  This means Americans will be stuck with the millions of gallons of manure, millions of pounds of air pollution, and community exposure to pollution.  The deal does not appear to have any contingencies to prevent or remediate these imminent pollution increases.

Furthermore, while many consumers know China’s history of food safety disasters, including at least several coming from Shuanghui itself, ironically, China actually bans the use of controversial drugs like ractopamine.  The deal apparently only includes 50% of Smithfield going ractopamine-free; but why not 100% ractopamine-free?  The proposed deal makes no provisions for this to happen.  It should; American and Chinese consumers deserve the highest safety standards.

Lastly, CFIUS should consider the financial threats this deal poses.  If the subsidy payments to Smithfield and its contract pig growers continue – and there is no reason to think that they will not – Americans will be paying for a Chinese company to produce a lot of food for Chinese consumers.  This hardly seems an appropriate use of U.S. taxpayer dollars, especially if we are getting unhealthy and lower-quality meat, and left holding the bag with regards to pollution.  

Before the deal is finalized, tell Smithfield to ban ractopamine!  Sign the petition here.


[1] “Half of Smithfield’s U.S. pork will soon be off ractopamine – CEO.”  (May 15, 2013)