MercoPress. South Atlantic News Agency

Brazilian group becomes world's leading meat packer

The Brazilian group JBS, which is the leading beef exporter of Latinamerica announced this week the purchase of Swift & Co., the third largest fresh meat (beef and pork) packer in the United States, thus becoming the world's leading meat packer.

The deal involves 225 million US dollars cash and taking on Swift's 1.2 billion US dollars debt and should be completed by July following approval from local authorities. The sale comes in the wake of tough times for Swift, which has been owned by a Dallas private equity firm, HM Capital Partners, since 2002 when ConAgra Foods sold it. A federal immigration raid last December also resulted in 1,300 workers being arrested at Swift plants, including about 200 at the Worthington, Minnesota, plant. Swift announced after that it might sell out. "The acquisition reflects the constant expansion policy of JBS", said the company's CEO Joesley Mendonca Batista who added that the expansion strategy was to make JBS a global company and with Swift "we'll reach the Asia-Pacific markets". JBS has plants in Brazil, Argentina and Australia and the Swift acquisition makes it Brazil's biggest food company. In Argentina JBS has five plants in three different provinces and in September 2005 purchased the Swift abattoir (which no longer belonged to the US corporation) for 200 million US dollars. JBS participation in the Argentine livestock purchasing market is estimated above 9%. Quickfood Argentina's CEO Miguel Gorelick described the takeover as "positive for Mercosur" "This means the globalization of the meat industry, which contrary to the rest of the food industry had no global companies, with the European and US corporations focused on their consumer markets", added Gorelick. "The operation could in the mid term help Argentine and Brazilian beef access to the US market". "A major independent meat company owned by a large international conglomerate is not unusual in our business. It's a continuation of an ongoing trend," said Jeremy Russell, director of communications and government relations for the United States National Meat Association. However in some US cattle ranching states such as South Dakota, the Congressional delegation Senators Tim Johnson and John Thune and Republican Stephanie Herseth Sandlin called for greater antitrust protection for livestock producers. "As a longtime supporter of country-of-origin labeling, and having expressed deep concern over the consolidation in agricultural businesses, I find this development especially troubling" said Senator Thune of the merger. "American consumers deserve to know where their food is produced, and U.S. farmers deserve a fair price for their livestock. This kind of deal accomplished neither of those standards" he insisted.