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Antitrust Review Sought for JBS Takeover of XL Beef Units

About 40 agricultural and consumer groups have asked the U.S. Justice Department for an expanded, in-depth antitrust review of the possible takeover of XL Four Star Beef Holdings in the United States by Greeley, CO-based JBS, USA.

The request came in a Dec. 21 letter to Attorney General Eric Holder and Renata B. Hesse, the acting assistant attorney general for the antitrust division.

JBS has taken over management of the five XL facilities in the U.S. and Canada, including the Brooks, Alberta Lakeside plant that was the center of an E. coli crisis. JBS has an option to purchase the facilities within six months, a move that would make it the largest beef producer in North America.

“We believe this proposed merger would reduce competition and seriously harm both cattle producers and consumers,” the group letter says. “We therefore request that no early termination of the antitrust evaluation regarding the acquisition of the two U.S.-based packing plants be granted and that the Justice Department make a second request for information to extend the investigation.”

The agricultural and consumer groups point to the Justice Department’s 2008 denial of JBS’s attempt to acquire the National Beef Packing Company, the fourth largest U.S. beef packer. That decision was “a historic event that marked a long-awaited turning point in the unmitigated trend toward price-distorting, oligopolistic meatpacking concentration nationally,” the groups said.

To allow JBS, currently the nation’s third largest beef producer, to expand would be a retreat from that 2008 decision, according those who signed the letter.

Signers include several state and national cattlemen’s groups, consumer groups like the Cornucopia Institute and Food and Water Watch, and farm groups like the National Farmers Union and the National Family Farm Coalition.

JBS, USA has not yet said whether or not it will exercise the purchase option and conclude the deal valued about $100 million.

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