In 2013, the WH Group acquired Smithfield Foods for $4.7 billion, representing the largest acquisition by China of a U. S. company. The transaction was approved by the Committee on Foreign Investment in the U. S. that found no national-security risk from the purchase.
In recent weeks there has been growing concern over China represented by military aggression, support of the Russian Federation, the apparent danger of Tik Tok and the spy balloon episode, all solidifying opposition to China our greatest strategic and commercial adversary. Politicians are now questioning the wisdom of China owning a major agri-business enterprise, slaughtering 30 million hogs annually and representing an important component of the food supply chain.
Senator Tom Cotton (R-AR) noted, “From purchasing fields and pastures to gobbling up companies like Smithfield, Chinese influence in American agriculture means that China’s needs, not America’s, come first”. This somewhat inflammatory statement is at variance with fact since the WH Group only acquired a small acreage with their acquisition of Smithfield plants.
Shane Smith, CEO of Smithfield, has devoted considerable time meeting with legislators and officials in Washington, assuring them of the independence of Smithfield and its commitment to the U. S. All pork products sold by the company are derived from hogs bred, raised and processed in the U. S.
Smith pointed to an increase in annual sales from $13 billion to $18 billion following the acquisition 10 years ago. This is a meager three percent per year and clearly below the rate of inflation. He pointed to the fact that the company has hired 3,000 more employees in the U. S. and expanded into other meat categories. Smith noted that the acquisition has resulted in export of some new products to China including bacon. Smithfield supplies by-products comprising heads and feet, that are traditionally consumed in China but have no markets in the U.S.