There is growing concern on Capitol Hill about the proposed sale of the nation’s largest pork producer, Smithfield Farms, to a Chinese company.
Shuanghui International, valued at $7.1 billion, wants to buy Virginia-based Smithfield for $4.7 billion.
Sen. Debbie Stabenow, D-Mich., head of the Senate Agriculture Committee, said Shuanghui, China’s leading pork producer admitted to putting an illegal additive in its food products in 2010.
“The agencies responsible for approving this possible merger must take into account China and Shuanghui’s troubling track record on food safety and do everything in their power to ensure our national security and the health of our families is not jeopardized,” Stabenow said last week.
She said earlier this year thousands of dead hogs were found floating down the Huangpu River in Shanghai and she questioned whether all of the China’s food system is contaminated.
Bipartisan concern over the sale have also been raised by Sen. Charles Grassley, R-Iowa, Rep. Rosa DeLauro, D-Conn., and Rep Randy Forbes, R-Va. Grassley worries the sale could force independent and family farmers out of the competitive market.
“Now, in one fell swoop, 26 percent of U.S. pork processing and 15 percent of domestic hog production will be controlled by a foreign company,” said Roger Johnson, president of the National Farmers Union, to Fox News.
USA Today reports the decision to allow or deny the sale might rest in the hands of a powerful and secretive government panel, the Committee on Foreign Investment in the United States (CFIUS). Established in 1978, CFIUS was given the power to review the impact foreign purchases of American companies have on national security in 1988.
Headed by the Treasury secretary, the committee includes members from 16 departments and agencies, including the departments of Justice, Defense, Commerce and Homeland Security.
CFIUS has the power to require certain jobs only be given to U.S. citizens or that sensitive parts of a company be overseen by an American citizen, who works closely with the government.
Many business transactions have been abandoned in the face of CFIUS opposition.
"To have a Chinese food company controlling a major U.S. meat supplier, without shareholder accountability, is a bit concerning," Grassley said. "CFIUS' scrutiny of this acquisition is vitally important."