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AMI Testifies Against Agribusiness Antitrust Legislation

Thursday, September 28, 2000

Washington, DC – Agribusiness antitrust legislation introduced in the 106th Congress would dilute the focus and effectiveness of current federal antitrust enforcement, unfairly target the agribusiness community for separate antitrust enforcement and politicize antitrust enforcement, according to American Meat Institute (AMI) President J. Patrick Boyle.

In testimony before the Senate Subcommittee on Antitrust, Business Rights and Competition, Boyle noted that consolidation in the food production, distribution and marketing sector over the last decade is a reaction to intense competition driven by consumer demand and marketplace realities. Moreover, according to Boyle, consolidation in the food sector is paralleled by recent consolidation in other sectors, such as healthcare, financial services and banking.

“Tough competition in the meat industry is driving businesses to operate more efficiently and more aggressively than ever before,” Boyle said. “And sometimes, that has meant that businesses choose to merge or to acquire or to be acquired in order to stay in business.”

Boyle added that mergers and acquisitions in the meatpacking industry are generally good developments, because they help sustain or strengthen businesses, preserve jobs and many times they keep communities financially healthy. Against this extremely competitive and dynamic economic backdrop, Boyle said recently proposed agribusiness antitrust legislation threatens to place a regulatory stranglehold on the food industry.

The "Agriculture Competition Enhancement Act" (S. 2252), introduced by Sen. Charles Grassley (R-IA) last March, would place antitrust enforcement authority outside the Department of Justice. According to Boyle, this would create a needlessly prolonged, duplicative and potentially politically charged antitrust process” by giving USDA the ability to oppose the pre-merger review opinions of the U.S. Department of Justice (USDOJ). In addition to pitting one federal agency against another, the bill would give USDA access to pre-merger review documents containing extremely sensitive information about the affected companies, he said.

Boyle also explained that another agribusiness antitrust bill, "The Farmers and Ranchers Fair Competition Act" (S.2411), would require businesses as diverse as banks, textile manufacturers, food processors, supermarkets, paper mills, tobacco companies, seed companies and farm machinery manufacturers to file separately with USDA (in addition to the USDOJ) for pre-merger review and approval.” He expressed concern that the bill would require companies to disclose highly confidential information about contractual relationships and business alliances with USDA each year. Boyle said both bills would ultimately hurt rural American communities – the same people they were intended to assist. By stalling mergers and impeding the flow of capital investment to the agribusiness community, the bills would drive struggling businesses – many located in rural communities -- to close their doors rather than wade through a new bureaucratic morass of complicated pre-merger approval processes.

Another unintended consequence of the agribusiness antitrust bills, according to Boyle, would be the pricing U.S. meat products out of international markets. An added regulatory burden on U.S. companies could impede structural adjustments that promote efficiency, thus driving up the prices of U.S. meats and reducing international market share. The complete text of Boyle’s testimony is available on AMI’s web site at www.meatinstitute.org.

AMI represents the interests of packers and processors of beef, pork, lamb, veal and turkey products and their suppliers throughout North America. Headquartered in Washington, DC, the Institute provides legislative, regulatory and public relations services, conducts scientific and economic research, offers marketing and technical assistance and sponsors education programs.

For more information contact:
Janet Riley
Vice President, Public Affairs
Sara Lilygren
Senior Vice President

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