WASHINGTON, Sept. 29, 2014 – Attorney General Eric Holder will leave office after six years with a legacy highlighted by civil rights and voting rights enforcement but with an antitrust record that disappointed many who thought that he would move more vigorously to arrest further concentration in the food processing and farm input industries.
Holder and Secretary of Agriculture Tom Vilsack held five highly-publicized workshops on competition in agriculture in 2010, giving long-time critics of consolidation of agribusiness companies, especially meat processing, their most optimism in years. But two years later, Brother David Andrews of Food and Water Watch wrote, “The Obama Administration lifted up hopes and dashed them to the dustbin of history.” Andrews, a long-time critic, called the lack of follow-up action “a terrible and historic defeat at the hands of the corporate meat industry.”
Significantly, Vilsack’s off-the-cuff remark to reporters last week on Holder’s record omitted any mention of their joint focus on agribusiness concentration four years earlier. Instead, Vilsack said that Holder “certainly has been valuable to us in . . . resolving historic civil rights cases.”A July 2012 report by Holder’s Antitrust Division concluded that “a wealth of discussion and information on the state of competition in the agricultural sector” had given the Justice Department “an enhanced understanding of agricultural markets” and a commitment to “taking all appropriate investigatory and enforcement action against conduct threatening harm to competition in agricultural markets.”
Agri-Pulse described the report at the time as “a major letdown to critics of concentration of economic power in the seed business, livestock slaughter, poultry production and food retailing who once entertained hope that the Obama Administration would move more forcefully to prevent further concentration and enhance the market power of ‘independent’ producers who shy away from growing on contract.”
DOJ was able to cite two antitrust cases it brought following the workshops, challenging Dean Foods’ acquisition of a mid-size milk bottling plant in Milwaukee and a suit to block the sale of a Tyson Foods chicken plant in Virginia to one of its competitors. In both cases, government lawyers accepted partial settlements in 2011 that fell short of their original goals. Subsequently, DOJ allowed Tyson Foods to acquire Hillshire Brands and cleared the merger of Cargill, ConAgra and CHS flour milling operations after requiring divestitures of some facilities.
Holder’s Antitrust Division also allowed Brazilian-owned JBS USA to acquire bankrupt poultry producer Pilgrim’s Pride in 2009 and to take over beef packing plants in Idaho and Nebraska. In each the Ranchers-Cattlemen Action Legal Fund-United Stockgrowers of America and several allied groups petitioned DOJ to block the acquisitions, to no avail. The same groups also opposed another major meat industry acquisition that occurred on his watch but largely beyond the reach of U.S. antitrust law – the purchase of Smithfield Foods by a Chinese conglomerate.
Perhaps as disappointing to the critics was DOJ’s decision not to challenge Monsanto’s biotech seed business. Monsanto disclosed in November 2012 that the department had ended a formal investigation of its soybean traits business and the competitive behavior of the seed industry without charges. The Antitrust Division asked Monsanto three years earlier for information about marketing practices for its Roundup Ready® soybeans. Although DOJ made no public statement, the company said that it received written notification from DOJ that the inquiry was closed.
The DOJ report itself may have suggested why little action followed the widespread complaints lodged by critics and aggrieved producers at the five 2010 workshops. “Participants identified an array of challenges facing the agriculture sector, many, if not most, of which fall outside the purview of the antitrust laws,” the report said, and “do not serve directly other policy goals like fairness, safety, promotion of foreign trade and environmental welfare. Many of the workshop issues may require public or private solutions beyond the antitrust laws.” It added that “today’s antitrust laws do not permit courts or enforcers to engineer an optimal market structure, breaking up firms simply because one might prefer there be more of them (or for other similar reasons).”
Holder, who attended four of the five workshops, said that while “vigorous and appropriate enforcement” of antitrust laws is essential to ensuring a fair marketplace for agricultural producers, antitrust enforcement actions will not solve every problem. The limitations on more vigorous antitrust enforcement were explained in August 2009 by Bert Foer, president of the American Antitrust Institute, in a talk to the Organization for Competitive Markets
The high levels of concentration are facts on the ground. The antagonism toward antitrust on the part of the federal courts, especially the U.S. Supreme Court, will likely remain a substantial limiting factor on government initiatives during the next four years. Special interests in the food sector are particularly powerful. If progress is to be made on generating more competition in the food sector, there will have to be changes in antitrust thinking and enforcement more generally.”
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