EU asks market regulator to review US-Poland pork deal

By Oscar Rousseau contact

- Last updated on GMT

Smithfield Foods is a $15bn food giant and claims to be the biggest pork processor in the world
Smithfield Foods is a $15bn food giant and claims to be the biggest pork processor in the world

Related tags: Poland, European union, Livestock, Smithfield foods

Brussels has ordered Poland’s market watchdog to “review the competition effects” of Smithfield Foods’ takeover of abattoir Pini Polonia.

The impact of Smithfield Foods’ acquisition of Pini Polonia on domestic pig slaughtering will go under the Polish Office of Competition and Consumer Protection’s (UOKiK) microscope.

US-based Smithfield Foods and Pini Polonia are Poland’s largest pig slaughterers. Smithfield Foods​ boasts 10 abattoirs, processing factories, a farm and an HQ in Poland. Pini Polonia runs a single slaughterhouse in Kutno, Poland. Together, they are responsible for a large number of pigs commercially killed in the country.

Smithfield Foods could secure a pig slaughter monopoly in Poland if the deal is approved, which could dent farmers ability to negotiate fair prices for the livestock they supply. So the EU has asked UOKiK to examine the transaction.

Smithfield’s eastern Europe expansion

While the European Commission has acknowledged the takeover would have no impact on pork sector competition outside Poland, it said the proposed transaction could “affect competition” in Poland’s pig slaughtering sector.

UOKiK is well placed to explore the ramifications of the deal. The market regulator has already been involved in multiple cases regarding Smithfield Foods​, which has been growing in power and size in Poland, one of the EU’s biggest pork producers.

In May 2017, the company acquired three Polish operations​ from Pini Group: meat processing plant Pini Polska, cutting plant Hamburger Pini, and a greenfield investment project Royal Chicken, which is still under construction.

Slaughterhouse Pini Polonia is currently owned by The Pini Group, which runs seven companies across Italy, Hungary and Poland.

Pini Polonia declined to comment on the latest development, while Smithfield Foods could not be reached to comment at the time of writing.

Smithfield Foods claims to be one of the world’s largest pork producers and is a wholly-owned subsidiary of Hong Kong-based WH Group. Smithfield employs more than 9,000 staff in Poland.

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