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Are consumers OK with Smithfield Foods sale?


(MoneyWatch) On September 24, shareholders of Smithfield Foods (SFD) will vote on whether to approve China's Shuanghui International's $7.1 billion acquisition of the U.S. pork producer. If the deal goes through -- and so far there's been little serious opposition -- this will be the largest ever takeover of a U.S. firm by a Chinese one.

Zhijun Yang, CEO of Shuanghui. says the deal will create one of the world's largest "global animal protein" enterprises. This is a curious turn of phrase (and may be a matter of translation) because the rest of us might think of Smithfield as a food producer. After all, the company is the world's largest hog producer and pork processor.

But a pig makes more than meat. It also produces heparin, an anticoagulant used in dialysis to prevent and treat blood clots in the veins, arteries and lungs. It is one of the oldest medicines still in use, administered in the U.S. to some 12 million patients annually.

In 2008, patients taking heparin began to have difficulty breathing, suffer from nausea and sweating and, in some cases, low enough blood pressure to cause heart problems. The heparin they had taken had been contaminated by a non-naturally occurring molecule that costs a fraction of the drug. The contamination of American heparin supply was linked to its manufacture in China.

When reviewing the Chinese acquisition of Smithfield, U.S. lawmakers also expressed concern over Shaunghui's link with a scandal involving clembutorol. The fat-burning drug makes meat leaner but is poisonous to humans. In March 2011, hundred of people became ill after eating Shuanghui meat products made from pigs that had clembuterol in their feed.

The food industry, it turns out, has an impact on much more than the food we eat. The declining effectiveness of antibiotics is one of our biggest public health concerns and, according to Consumer Reports, 80 percent of all antibiotics sold in the U.S. are used by the meat and poultry industry.

In China, this number is around 50 percent. But scientists have already found diverse and abundant antibiotic resistance genes in Chinese swine farms. Cases in which antibiotic resistance in humans was caused by antibiotic resistance in animals have confirmed that overuse in farming can cause a problem for people.

By anyone's definition, this represents a significant public health issue. Moreover, many of the biggest global health scares recently have emanated from viruses originating in China, and questions keep being asked about cross-contamination caused by the proximity of hog and chicken farming. Nevertheless, no assurances have been demanded or given concerning food security, operating standards or environmental impact.

Supporters of the deal argue that U.S. Department of Agriculture and FDA already provide enough oversight. I wonder how many American citizens share their confidence. There's been little consumer protest about the sale of Smithfield. Is that because, as long as meat is cheap, we don't much care how its produced? Is it just xenophobia that makes me wonder whether this is another case of willful blindness?