Fear Over Chinese Ownership of Smithfield Foods
"America has the safest food supply in the world."
And it's increasingly being taken over by foreign companies.
How often have you heard the first phrase? How long will we be able to continue saying that?
The May 29 announcement that Smithfield Foods is being bought by Chinese firm Shuanghui International Holdings Ltd. is the latest in a string of American food company acquisitions by foreign-owned corporations. And maybe just one more piece of evidence that, while the 20th century truly was the American century, the 21st century appears destined to belong to China.
Back in February, I was worried to see H.J. Heinz Co. bought – seemingly by the duet of amiable Berkshire Hathaway and some obscure investment firm, 3G Capital. Except 3G is not so obscure, having bought Burger King in 2010. Despite a New York address, its roots are in Brazil. 3G also helped finance the 2008 acquisition of Anheuser-Busch by Belgian firm InBev. And the first management move for the new Heinz – the appointment of Bernardo Hees as CEO -- was obviously engineered by the Brazilians, not the Oracle of Omaha.
I'll throw in the fact that South African Breweries bought Miller Brewing in 2002.
Getting back to meat companies, remember Swift & Co.? It was bought by Brazilian meat packer JBS in 2007. JBS also bought Smithfield’s beef group in 2010. And poultry leader Pilgrim's Pride in 2009.
Hang in there, Tyson!
And George Weston (admittedly a Canadian firm) sold its U.S. bakery operations in 2008 to Grupo Bimbo of Mexico. Which bought Sara Lee's bakeries two years later.
By the way, that makes for foreign ownership of companies No. 5, 6, 9, 16, 18, 25 and 31 from our Top 100© food & beverage companies list.
Maybe I should stop beating up on foreigners and start taking my frustrations out on the U.S. stock market -- I've railed before about how it's an overrated barometer of America's economic health -- and anybody who forces a corporate takeover. Like Continental Grain, which, as a significant stakeholder in Smithfield, has been trying to split up the meat company to maximize the value of its investment. Why break up an American icon just to raise the stock price? Think of the 46,000 employees. (Oops, Continental Grain started life as a Belgian grain trading firm.)
What's it all mean? I don't know. Maybe I'm a little xenophobic. Maybe it's payback for what American firms did in the 20th century. Maybe I just long for the good old days. Maybe I worry that the U.S. will become the Great Britain of the 21st century.
But I also have a little fear that “the safest food supply in the world” will be a little less so when companies in foreign nations are calling the shots.