The Cornucopia Institute, an organic industry watchdog, has released a formal request to the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) to scrutinize Tyson Foods’ acquisition of Tecumseh Poultry.
Tyson Foods on June 3 closed on a deal in which it would acquire Tecumseh Poultry, also known as MBA Poultry, and its Smart Chicken brand. Tecumseh Poultry was one of the first poultry companies in the U.S. to use air chilling and has produced U.S. Department of Agriculture certified organic products since 2003.
Tyson Foods, in announcing the transaction, stated that the deal would enable Tyson Foods to be one of the nation’s leading producers of organic branded chicken. Tyson already produces organic chicken products under its NatureRaised Farms and Aidells brands.
Cornucopia Institute’s concerns
The Cornucopia Institute requested scrutiny of the deal, claiming it would irreparably harm competition in the industry.
The group, in a press release, stated that Tyson Foods, Pilgrim’s Pride and Perdue Farms, which are three of the four largest broiler companies in the United States, already dominates the growing organic chicken market. It further claimed the acquisition could substantially lessen competition in the organic poultry market.
“Greater consolidation by large companies including Tyson allows them to push out smaller companies or farmstead producers who would have difficulty competing with Tyson’s superior economy of scale,” said Marie Burcham, a food and farm policy analyst with The Cornucopia Institute.
The Cornucopia Institute asserted that smaller brands are more heavily impacted by the costs of organic grain and limited consumer recognition, and that small farmers struggle to remain in business due to that competition.
“We are concerned that Tyson and other large industrial livestock producers will easily be able to beat out any competition by controlling prices and squeezing more moderate-sized processors and marketers,” said Burcham.
Other Tyson Foods transactions
Tyson Foods has had a busy 2018 in terms of acquisitions and divestitures.
In addition to the Tecumseh Poultry deal, Tyson Foods this year has revealed plans to acquire American Proteins and AMPRO Products, as well grain elevators in the Tennessee towns of Dyer, Humboldt and Kenton, previously owned by The Andersons Inc.
Meanwhile, Tyson Foods has also announced that it would sell it’s Sara Lee and Van’s businesses to Kohlberg and Company, and its Circle Foods business to Ajinomoto Windsor.