Fearing the U.S. poultry industry is already too consolidated, Sen. Chuck Grassley wrote a letter to the U.S. Department of Justice (DOJ) Antitrust Division, urging the agency to thoroughly scrutinize a proposed deal that would merge Sanderson Farms and Wayne Farms.
Sanderson Farms, Cargill and Wayne Farms’ parent company Continental Grain announced the deal on August 9, in which Cargill and Continental Grain intends to buy Sanderson Farms for $4.53 billion, and combine Sanderson, the third largest poultry producer in the United States, with Wayne Farms, the nation’s seventh largest poultry producer.
In a letter to Richard Powers, assistant attorney general, DOJ Antitrust Division, Grassley, R-Iowa, stated that with the merger, the combined company would control about $15 of the U.S. chicken market.
“I am concerned that continued mergers and acquisitions in an already concentrated poultry industry will increase consolidation, frustrate competition and reduce marketing options. I also am concerned about the impact on consumer choice and price of poultry products,” Grassley wrote.
“I urge the Antitrust Division to thoroughly examine this proposed acquisition to preserve a competitive market in the U.S. poultry industry. I also urge the Antitrust Division to seek input from the Department of Agriculture in its analysis of the proposed transaction and its impact on the poultry market. The Antitrust Division should scrutinize this proposed acquisition to ensure that it will not reduce market access opportunities or facilitate anti-competitive and predatory business practices in the industry.”
Grassley, in his letter, also pointed out that executives within the broiler industry have been investigated for allegedly conspiring to fix prices and rig bids for chicken products. He also expressed his wishes that the Antitrust Division consider whether the proposed acquisition would result in more limited choices of poultry products and higher prices for consumers.
A copy of the letter was also sent to U.S. Attorney General Merrick Garland.
Grassley is the ranking member of the Senate Judiciary Committee and a member of the Senate Agriculture Committee.
He has recently expressed concerns of consolidation in the agrifood industry on other occasions. In June, he joined Sens. Jon Tester, D-Montana, and Mike Rounds, R-South Dakota, to introduce the Meat Packing Special Investigator Act, dedicated to preventing and addressing anticompetitive practices in the meat and poultry industries and enforcing the nation’s antitrust laws.
The introduction of that legislation followed the cybersecurity attack on JBS, and concerns that similar incidents on larger agrifood businesses could jeopardize the nation’s food supply.
