Tyson Mum on Foot-and-Mouth

The potential for a public relations disaster probably didn’t contribute to Tyson Foods’ decision to pull the plug on acquiring beef and pork producer IBP Inc.

Tyson’s decision likely had more to do with the questions raised by the Securities and Exchange Commission concerning IBP’s accounting practices than fears of a mad cow or foot-and-mouth disease outbreak associated with its products.

But, until the latest litigation matters are resolved in the multi-billion dollar food fight between Tyson and IBP, it is difficult to discern how big a role the recent foot-and-mouth outbreak in Europe played in the king of chickens’ decision.

Did the potential for an outbreak in the United States scare Tyson, which knows all too well the destructive power of association? Tyson, of Springdale, purchased Hudson Foods, of Rogers, in 1998 after a Hudson plant in Columbus, Neb., was found to have the e. coli bacteria. Hudson was unable to recover from the bad publicity.

Why would Tyson want to have any part in a beef company that has the potential for more serious disasters than the ones its chickens face?

Tyson wouldn’t comment on whether the foot-and-mouth outbreak played a role in dropping the acquisition of IBP. Spokesman Ed Nicholson would only refer the Northwest Arkansas Business Journal to previous comments on Tyson backing out of the IBP deal.

Dick Lobb, director of communications for the National Chicken Council, downplayed the idea, noting that pork giant Smithfield Foods Inc. of Virginia recently purchased one of the nation’s largest beef processors when it acquired Moyer Packing Co. Smithfield had lost to Tyson in the bidding war for IBP.

“There are a lot of interesting things going on in the meat and poultry sector,” Lobb said, pointing to the acquisitions, lawsuits and disease outbreaks. “Smithfield is making a pretty big move into beef, so they’re obviously committed to diversify.”