NMA QUESTIONS METHODOLOGY OF THE JUSTICE DEPARTMENT
ON RED MEAT INDUSTRY CONCENTRATION
Oakland, California -- National Meat Association asked Attorney General Janet Reno of the Department of Justice for answers regarding the management of potential concentration in the red meat industry. Taking into account USDA's recent study, Concentration in the Red Meat Packing Industry, and testimony provided by the Justice Department's Assistant Chief of Litigation for Anti-trust Willie Hudgins during NMA's recent convention, NMA expressed serious concerns about the potential effect of the intended acquisition by IBP, the nation's largest slaughterer/processor of steer/heifer beef, of Vernnon Calhoun, the largest independently owned slaughterer/processor of cow/bull in Texas.
The letter, dated February 26, 1996, requested the following on the behalf of small beef packers, livestock markets, cow/calf producers and cattle feeders in Texas and contiguous states in the southwest region:
1. Specifically, what information/criteria will the Justice Department consider in deciding when and/or if a firm in a certain market has unacceptable power?
2. Specifically, what is the criteria of which the Justice Department will make a determination that an industry loses its competitiveness?
3. Specifically, what are the models that the Justice Department uses to measure a lessening of competition?
4. If a firm would have unacceptable market power due to expansion or acquisition, as proven by an economic impact study, would Justice stop this expansion before the fact or wait until after the fact?
“We had hoped that the Study just completed by USDA would have provided information useful to your Department as it makes its analysis,” reads the letter. However, as reported by the Study, due to insufficient data, no analysis was done to determine whether 'cows and bulls' and 'steers and heifers' are in the same market. NMA concluded the letter by stating: ' 'It is important to obtain information from reliable economic analysts to assist your investigators in their work. We are prepared to request such economic analysis with your assurances that any decision will be held in abeyance until it is available.''
National Meat Association is a non-profit trade association representing meat packers and processors, as well as equipment manufacturers and suppliers who provide services to the meat industry. The association, with over 600 members throughout the United States, includes membership in Canada, Australia and Mexico.