Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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AG MYERS SUES TO BLOCK MERGER OF THREE OF FIVE LARGEST BEEF PROCESSORS IN THE U.S.

October 20, 2008

Challenged deal is expected to reduce cattle prices for ranchers and increase beef prices for consumers throughout the country.

Oregon Attorney General Hardy Myers today filed suit along with the United States Department of Justice and Attorneys General from several other states to block the acquisition of National Beef Packing Co. (National) by JBS Beef, SA (JBS). JBS is also seeking to acquire Smithfield Beef Group (Smithfield). National, Smithfield and JBS are currently the third, fourth and fifth largest beef processors in the United States, respectively. If both acquisitions by JBS were allowed, the deals would give the Brazil-based company, the world's largest beef processor, a third of the U.S. beef processing market, making it the largest beef processor in the U.S. and concentrating over 70 percent of this country's beef processing capacity in just three firms.

"The cattle business is a vital component of Oregon's economy, contributing over $400 million annually," Myers said. "Many consumers rely on the cattle industry to provide high-quality, reasonably priced beef products to feed their families. This merger would hurt Oregon ranchers by reducing what they get paid for their cattle and hurt Oregon consumers by driving up the retail cost of beef."

According to the complaint filed today in the federal district court in Chicago, Illinois, the consolidation of three of the five largest U.S. beef processors would give JBS and the remaining two large beef processors, Tyson and Cargill, the market power to reduce the price paid to ranchers and feed yards for cattle. At the same time, this increase in market power would enable JBS, Tyson and Cargill to raise the prices they charge customers for processed beef.

Consumers wanting more information about this case and Oregon consumer protection in general may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392. The Oregon Department of Justice is online at www.doj.state.or.us.

Contact:

Jake Weigler, (503) 378-6002
Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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