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Organizations Say Merger Settlement Not Enough
Published Tuesday, December 30, 2008 at 04:58 AM
R-CALF USA and the Organization for Competitive Markets have sent a formal letter to the Justice Department and each of the 17 states attorneys general involved in settlement negotiations between Brazilian-owned JBS and National Beef Packing Company. JBS wants to purchase National Beef, but many believe the deal would significantly limit competition in the beef packing industry. The companies have agreed to divest themselves of meatpacking plants in the Southwest and High Plains. But, the two organizations call that a – necessary but insufficient remedy.

R-CALF USA and OCM have submitted recommendations for settlement options. They say millions of consumers and thousands of cattle producers already know the cattle market is not competitively healthy, and, according to R-CALF USA CEO Bill Bullars, - allowing JBS to become even more dominant will only make things worse.

The cause of these competitive problems is the packers’ use of captive supplies. The groups say, unless the Department of Justice and states impose restrictions on JBS to restrict its use of cattle procurement practices, any partial merger between JBS and National would ultimately result in significant harm to competition.

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