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A Factory Farm Force
U.S. Multinational Smithfield Moves into Europe
rom its humble beginnings as a father-and-son ham-curing operation in rural America more than 70 years ago, Smithfield Foods has grown into a 7.75 billion Euro-per-year, multinational meat conglomerate with operations in 13 countries on three continents. Of late, Virginia-based Smithfield has been expanding aggressively into Eastern Europe, where its operations have stirred controversy because of their threats to local farming economies, the environment and animal welfare.
Smithfield’s “stable to the table” philosophy is known as vertical integration — controlling every aspect of meat production, from breeding and feeding through slaughter, processing and packaging. Buying out struggling companies is also a key strategy, with the company admitting that “opportunistic acquisitions...are fundamentally part of how we do business.”1 By 1999, following a string of acquisitions and mergers, Smithfield had become the largest pork company in the United States. At the same time, Smithfield faced record fines stemming from environmental violations. Due to bans and restrictions on industrial-scale livestock operations in several U.S. states, Smithfield began looking across the Atlantic for new business prospects in the late 1990s. It has since become the largest pork producer in the world. Its European operations and deals include:
Acquired a controlling interest in Animex, one of Poland’s largest meat and poultry processors, for US $51.2 million (1999). Established Polish-run front company Prima Foods (2001), without directly breaking a Polish law that restricts farm purchases by foreigners. This opened the door to the purchase of struggling hog farms and contracts with small farmers — 1,600 as of 2004. Fused Animex with Polish meat company Morliny SA (2004). Smithfield’s operations in Poland are divided among: • Pork and beef, through Agryf SA, ZM Mazury, Constar SA, Morliny, Krakus, Animex Agri (three farms with 32,000 hogs) and Animex Wielkopolska (four farms with 23,000 hogs). • Turkey, chicken and geese, through Ekodrob SA, Opolskie Zaklady Drobiarskie SA, Suwalskie Zaklady Drobiarskie LLC and Animex Poludnie LLC. • Animal feed, through Contipasz SA and Animex Pasze LLC.
Acquired meat processors Agrotovis and Comtim, both based in the Timisoara region, and meat distributor Agroalim Distribution (2004). Smithfield now owns 25 pig factory farms in western Romania.2
Announced a planned merger of its Western European operation, Groupe Smithfield Holdings, with Spain’s processed meat leader Campofrio Alimentacion SA (30 June 2008). The merger would form the largest processed meat company in Europe, with annual sales of more than 4.5 billion Euro; a leading market share in Belgium, France, Portugal and Spain; and a strong presence in the Netherlands, Romania and Russia. The new entity, in which Smithfield will own a 36 percent stake, would be based in Madrid and continue to be known as Campofrio.
Purchased pork processor Societe Bretonne de Salaisons (1998), processed meat producer Societe Financiere de Gestion et de Participation (1999) and cold meat producer Jean Caby (2004).
Merged fresh meat company Norwich Food and processor Ridpath Pek into Smithfield Foods Ltd. (2004).
Other worldwide acquisitions include a 15,000-head pig farm in Matto Grosso, Brazil; factory farms in Sonora and Vera Cruz, Mexico; and a joint venture with Artal Holland BV that formed Maverick Food Co. Ltd. in China’s Guangdong Province. was closed, all Constar meat products were pulled from store shelves and Polish officials launched an investigation. Overall, Smithfield’s low production costs are being externalized, taking a toll on local economies and the environment. The stench from farms affects tourism in northern Poland’s pristine “Green Lungs” region. People living near Smithfield’s farms must deal with foul odors, headaches, discomfort and falling property values. Family and communitybased farms unable to compete with Smithfield’s massive production volumes are being driven toward bankruptcy. Smithfield’s farms are the recurring target of farmer and community protests in Poland. Family farmers often blame Smithfield for falling pork prices and picket company facilities. Resident opposition groups in some cases have been able to stop construction of new factory farms. In June 2003, residents of the Goldap area in northeast Poland stopped Smithfield from building five additional farms of more than 4,000 pigs each. With three Smithfield facilities already in their community, Goldap residents feared more farms would pose more environmental and economic threats.9
Problematic Politics, Pollution and Production
Smithfield’s political power in Eastern Europe is undeniable. In 2001, Smithfield’s political allies were able to weaken Poland’s Law on Waste by reclassifying liquid pig manure from waste to an agricultural product. Of Romanian officials, a Smithfield executive stated: “From the very beginning, we have benefited from the unconditional support and encouragement of the Romanian government.”3 In Eastern Europe, the company sidestepped EU environmental laws in Poland and Romania during the EU accession transition period, essentially allowing the company to pollute as a heavy industry.4 Smithfield’s pollution is extensively damaging to the ecosystem in northern Poland, according to the Helsinki Commission. Overapplying manure to fields is harming water systems connected to the Baltic Sea, and ammonia and nitrogen waste is contaminating the soil.5 In the Polish town of Byszkowo, residents developed rashes and eye infections after Smithfield’s waste lagoon overflowed and polluted two lakes.5 Smithfield’s animal health and welfare practices also fall short. Pigs normally live in crowded facilities with poor ventilation, no daylight and little or no space to turn around, making them prone to injuries and infections. In Wieckowice in 2002, Smithfield overstocked hastily prepared storage buildings with pigs, which died by the hundreds. Their carcasses lay in a dumpster before being hauled away, producing odors that sickened schoolchildren. Children who swam in a lake containing Smithfield’s pig manure developed eye infections.7 In summer 2007, swine fever struck Smithfield farms in Romania, and once again carcasses lay for days before they were hauled away. The farms did not have proper animal health or environmental certificates, prompting their closing. About 39,000 pigs from farms throughout the region had to be preemptively killed because the disease is highly infectious.8 Poor sanitation practices came to light in April 2005 when a Polish television crew discovered workers at a Smithfieldrun Constar plant in Starachowice were “reviving” old meat by scraping mold off sausages and other tactics. The meat was sent back to stores with new expiration dates. The plant
Davis, Michael. “Smithfield says acquisitions need nurturing not gutting,” , 15 May 2004.
2 Bota, Dragos. “Swine Fever Hits Romanian Farm,” Associated Press, 7 August 2007. 3 “Prime Minister Tariceanu meets with Richard J.M. Poulson, Executive Vice President of Smithfield Foods, Inc.” Press Release, Government of Romania, 18 January 2006. 4 5
Garbacz, Marek. “W uscisku agrokorporacji,” , 19 July 2006.
“Assess the environmental impact of the industrial pig farms rules.” Press Release, Clean Baltic Coalition, 3 March 2004.
Tietz, Jeff. “Boss Hog,” , 14 December 2006.
Hundley, Tom. “Village in Poland Clashes with U.S. Pork Giant,” , 7 February 2005.
8 “Smithfield Foods Confirms Classical Swine Fever in Romania,” Press Release, Smithfield Foods, 8 August 2007. 9
“Protesty wygryzly swnie,” Pierwszy Portal Rolny, 12 June 2003.
For more information: Food & Water Europe E-mail: email@example.com Web: www.foodandwatereurope.org Tel: Anna Witowska, +48 14.642.21277 Copyright © 2008 Food & Water Europe
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