U.S. Senator concerned about Tyson-Hillshire merger

by The City Wire staff ([email protected]) 63 views 

U.S. Sen. Chuck Grassley, R-Iowa, is pressing the Justice Department to heavily scrutinize the proposed acquisition by Tyson Foods of Hillshire Brands.  

In a letter sent Monday (Aug. 11) Grassley said he was concerned about how the merger could increase concentration and decrease competition in the U.S. pork industry, which is big business in his home state of Iowa. He also expressed concern about the impact on consumer choice and the price of pork.

“Independent, small producers have been to my office to express their own concern. In particular, they fear that Tyson could engage in the practice of ‘tie-in’ sales of sows with market hogs, which would put independent producers at a tremendous disadvantage as they look for markets for their sows,” Grassley said.

Grassley has some weight in this issue as the ranking member of the senate judiciary committee which has jurisdiction over anti-trust policy.

In the letter sent to William Baer, the assistant attorney general for the Antitrust Division, Grassley urged the Antitrust Division to thoroughly examine this acquisition to protect competition in the pork industry.  

“In particular, I urge the Antitrust Division to scrutinize the implications of this transaction on the sow market. The proposed Tyson Foods-Hillshire Brands Company combination could reduce the already limited number of buyers for the commodities of small, independent pork producers. Many independent producers and family farmers are concerned about increased vertical integration, expanded packer ownership, exclusive contracting and captive supply. I share these concerns about anti-competitive business practices, reduced market opportunities, and limited choice and higher prices for consumers,” Grassely noted in the letter.

Tyson Foods said it was cooperating with the Department of Justice.

“We are also willing to meet with Senator Grassley to address his questions,” said Dan Fogleman, spokesman with Tyson Foods.

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