JANUARY 16, 2001
MAPLE LEAF MAKES DEAL WITH SCHNEIDER/SMITHFIELD FOR MONOPOLY CONTROL OF MANITOBA HOG MARKET
Rossendale, Man.--"With the complete collapse of competition in the hog packing industry, the Manitoba government must move quickly to restore the Hog Marketing Board. The alternative would be to leave thousands of family farm hog producers captive to a single monopoly hog buyer," said NFU Vice-President Fred Tait.
Tait was commenting on the announcement that Maple Leaf would purchase Schneider/Smithfield's fresh pork operations in Manitoba. Maple Leaf will pay $44 million for two plants, both in Winnipeg. The deal leaves Maple Leaf as the single major buyer for hogs in Manitoba. The closest competitor will be the Smithfield Plant 800 miles away in Sioux Falls, South Dakota.
In its news release, Maple Leaf noted that "Over the past three years we have invested over $400 million in Manitoba." Maple Leaf also stated that it plans to wind down operations at the Winnipeg Schneider slaughter plant and consolidate primary processing in its newer, larger facility in Brandon. "Farmers can be forgiven for concluding that Maple Leaf has purchased the Schneider facility to shut it down and eliminate competition in the province. Maple Leaf's investment in Brandon was threatened by a proposed major expansion by Schneider/Smithfield so Maple Leaf made a deal," said Tait.
Schneider/Smithfield stated in its news release that it "remains committed to the fresh pork business through its investment in Mitchell's Gourmet Foods in Saskatoon, Sask." Further, as part of the deal, Schneider/Smithfield will purchase Maple Leaf Foods' share of National Meats Inc., a joint venture of Maple Leaf and Schneider/Smithfield located in Toronto, Ont. "With this deal, we seem to be moving toward a situation where each province will be dominated by a single packer. This would clearly reduce competition and drive down prices to farmers," commented Tait.
"The Manitoba government eliminated single-desk selling of hogs in an attempt to lure corporate hog mega-barns and, in turn, hog packing plants. The owners of those plants, who also argued for an end to single-desk selling, have now instituted single-desk buying. For farmers, the government, and the people of Manitoba, this is a disaster." said NFU Vice-President Fred Tait.
For more information on Maple Leaf and Schneider/Smithfield, please see backgrounder.
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For More Information:
Fred Tait, Vice-President: (204) 252-2773
Darrin Qualman, Exec. Sec.: (306) 652-9465
Backgrounder to the NFU's January 17 news release.
Maple Leaf Foods is part of the McCain family empire and one Canada's largest vertically-integrated hog/pork producers. Maple Leaf owns Landmark Feeds, the largest livestock feed company in western Canada. It owns Elite Swine, a hog genetics and production management and coordination company which manages the production of 1 million hogs per year. And it owns Rothsay Rendering. Maple Leaf Foods had 1999 sales of $3.5 billion.
Schneider Corporation, formerly on of Canada's largest food processors, is now owned by Smithfield Corporation. Smithfield has also purchased hog producers Carroll's Foods and Murphy Family Farms. Smithfield is now the world's largest hog producer, producing approximately 12 million hogs per year. Smithfield's annual sales to the end of April, 2000 were $7.8 billion [Cdn.]. Schneider/Smithfield had announced plans to quadruple the size of its Winnipeg Plant to slaughter 4.5 million pigs per year. Schneider/Smithfield has cited insufficient hog supply as part of its decision to "reconsider [its] investment in a new pork processing plant in Manitoba."