Colorado Attorney General Sues To Block Swift Merger

DENVER – Colorado Attorney General John W. Suthers today joined the United States Department of Justice and the attorneys general of 12 other states in a lawsuit aimed at preventing JBS Beef, SA, from acquiring National Beef Packing Company. If completed, the deal would give JBS – which is already the world’s largest beef processor – one-third of the U.S. fed-cattle-processing market, making it the largest beef processor in the Unites States (it is currently third-largest).

“This merger has the potential to significantly increase the price of beef for Colorado families, and to alter the important role that cattle production plays in Colorado,” commented Attorney General Suthers. “This industry is too vital to Colorado’s economy for the State to allow this anti-competitive conglomeration to take place.” 

According to the complaint filed today in federal district court in Chicago, Illinois, the merger would give JBS, Tyson Foods, and Cargill, Inc. the market power to reduce the price they pay for cattle to ranchers and feedyards. At the same time, this increase in market power would enable those companies to raise the prices they charge wholesalers and gocery stores for processed beef.

Nationally, U.S. beef packers purchase $30 billion worth of fed cattle each year, slaughtering and processing the meat into USDA-graded cuts and other products, which they then price and sell. JBS’s proposed acquisition of National would transform the company into the largest U.S. beef packer, with a capacity to slaughter more than 40,000 head of cattle per day – a number equal to one-third of the nation’s capacity. The deal would result in three firms controlling more than 85 percent of beef processing capacity on the High Plains, a region centered in Colorado.

The Colorado Attorney General’s Office has been investigating this transaction since May of this year in conjunction with the U.S. Department of Justice and the attorneys general of Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, and Wyoming. JBS, which is headquartered in Brazil, purchased Colorado’s Swift Foods Company in 2007. The company maintains its U.S. headquarters in Greeley.

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