The U.S. Cattlemen's Assn. (USCA) submitted to U.S. Treasury Secretary Steven Mnuchin a request for investigation of Marfrig Global Foods' nearly total acquisition of U.S.-based National Beef Packing Co.
Brazil-based Marfrig Global Foods announced recently that it raised its stake in National Beef from 51% to 81.7%. In 2018, Marfrig acquired a majority stake in National Beef, but this recent announcement means that the U.S.-based company will now be almost wholly owned by Brazilian interests.
The 2018 acquisition of a 51% stake in National Beef made Marfrig Global Foods the second-largest beef producer in the world. That transaction cost Marfrig nearly $1 billion but expanded its market access to South Korea and Japan, which was not accepting Brazilian beef at the time due to a scandal involving bribing meat inspectors and tainted meat.
USCA said it is firmly opposed to the increasing consolidation of the meat-packing sector and foreign ownership of U.S. agricultural interests. “Our request for investigation of these actions by the Committee on Foreign Investment in the United States demands a full review of Marfrig Global Foods’ acquisition of U.S. companies and calls for those outcomes to be explicitly written out and publicly published,” USCA said.
In a statement, USCA president Kenny Graner stated, "Today, nearly 30 million acres of U.S. agricultural land is held by foreign investors. Once Americans lose out on that capacity -- whether it be land, feedlots, meat processing facilities or other resources -- it may be that we will never have the opportunity to buy it back. In short, the growing trend of foreign interests acquiring U.S. agricultural resources jeopardizes the ability of our nation to feed itself. In our view, this is a direct threat to our democracy.”
The letter said the “Institute for Agriculture & Trade Policy said the growth of Brazilian meat-packing businesses has benefited from subsidized loans and other resources from the Brazilian National Development Bank.” In October 2018, federal prosecutors in Brazil alleged that bribes were paid in exchange for sweetheart loans for companies that included Marfrig Global Foods and conglomerate J&F Investimentos, controlling shareholder of JBS S.A., the world’s largest meatpacker. This incident followed shortly after Marfrig signed an agreement with federal prosecutors to pay $28.73 million to cover potential damages related to a previous bribery investigation in which Marcos Antônio Molina allegedly paid $2.87 million in bribes to obtain a loan from state-owned bank Caixa Economica Federal in 2012.
"We urge Secretary Mnuchin and the Committee on Foreign Investment in the United States to fulfill President Donald Trump's campaign promise to put America first by ensuring the long-term sustainability of America's farming and ranching families," Graner said.
“Further, given recent events that led to the United States Department of Agriculture banning the importation of Brazilian fresh beef, USCA believes this near-ownership investment of an U.S.-based meat-packing company by a foreign corporation threatens national security interests by unnecessarily risking the safety of our nation’s food supply. Brazil has proven time and time again to wholly reject the food safety standards that U.S. regulators have put in place to ensure not only the health of the domestic livestock herd but also the safety of its citizens,” the letter added.