May 16, 2007

Smithfield - PSF venture can kill market competition - expert

A law professor has expressed disappointment over the US Department of Justice's decision to allow pork mogul Smithfield Foods to acquire its rival conglomerate Premium Standard Farms (PSF), stating the merger can "kill competition in American agriculture".

University of Wisconsin law professor Peter Carstensen said he is "dumbfounded" by the approval of the Justice Department to every aspect of the buyout without reservation, especially Smithfield's acquisition on PSF's processing plant in North Carolina.

The fusion of Smithfield - the world's largest pork producer with US$11 billion in annual sales - and PSF - the nation's second largest producer and sixth largest pork processor in the world - is one of the biggest buyouts in US agriculture.

Cartensen - along with legal and economic scholars Neil Harl of Iowa State, Ron Cotterill of the University of Connecticut and Michael Stumo of the Organization for Competitive Markets - have fought anti-competitive bigness through academic research, Congressional testimony and, when all else fails, federal lawsuits.