November 16, 2000

Sen. Charles Grassley (R-IA) has urged Attorney General Janet Reno and Federal Trade Commission Chairman Robert Pitofsky to exercise "vigorous scrutiny" of Smithfield Foods' proposal to acquire meat giant IBP. Grassley said, "It is imperative that the appropriate federal regulators pay heightened attention to any possible negative horizontal and vertical integration implications of agribusiness transactions."

He earlier expressed concerns that the nation's largest pork producer has made an unsolicited bid to acquire the world's largest producer of beef, pork and related products. Reports indicate that Smithfield currently controls approximately 18.4% of the nation's pork slaughter capacity, while IBP controls approximately 17.7% of the market. "Such a combination would reduce the already limited number of buyers for the commodities of small, independent producers," Grassley said.

On Oct. 3, Grassley wrote a separate letter to DoJ and the FTC asking for consideration of a bid by Donaldson, Lufkin & Jenrette/Rawhide Holdings Corp. for IBP, Inc. News reports had indicated that one of the world's largest feed producers, Archer Daniels Midland Co. was a primary investor in the deal, Grassley said. ADM holds approximately a 12 percent interest in IBP, Inc.

Grassley said the government "has a responsibility to understand the ramifications of any further concentration in agriculture to ensure competition for the independent producers who get caught in the middle."