The following is a news release from New America:
WASHINGTON, DC — Brazilian meat packer JBS SA said Tuesday it plans to buy Hillshire Brands Co. in a $6.4 billion acquisition. This raises the prospect that the meat industry, which has become highly concentrated in recent years, will lose even more competition. This is a troubling development for consumers, who already face limited choices at the grocery store, says New America Schmidt Family Fellow Chris Leonard, author of the recently released The Meat Racket: The Secret Takeover of America's Food Business.
Chris Leonard covered JBS as the Associated Press National Agribusiness Reporter from 2008-2012. His book, released in February by Simon & Schuster, documents how a handful of meat companies took over America’s meat supply through a series of acquisitions like the one JBS proposed Tuesday.
“Consumers already face a disturbing lack of real choice at the grocery store meat aisle,” Leonard said. “Shoppers might see a rainbow of different brand names, but the majority meat products are really made by just a handful of companies. With this deal, the little-known company JBS will acquire brand names like Jimmy Dean, Ball Park, Hillshire Farms, and Sara Lee.”
The Meat Racket shows how legislators in Washington gave a free pass to the world’s biggest meat packers as the firms went on merger spree during the 1980s and 1990s. The result is that today’s meat industry is more consolidated than at any point in U.S. history. Just four companies make about 85 percent of all beef products, for example, while just three firms make almost half of all chicken products.
This consolidation means that companies like JBS and Tyson Foods can systematically underpay farmers and ranchers, while keeping prices higher for consumers. Every merger increases these companies’ market power, and reduces choice for the vast majority of Americans who eat meat.
About New America
New America is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States. To learn more, please visit us online at www.newamerica.org or follow us on Twitter @NewAmerica.
Source: New America
Posted by Haylie Shipp