For customers who have grown tired of the “Made in China” label on goods, there are going to be questions about how their sausage is getting made. Shuanghui International, China’s biggest meat producer, is on the verge of purchasing Smithfield Foods (NYSE:SFD), the company that owns the nation’s largest share of the pork industry. According to CNBC, all that remains is shareholder approval for the deal to go through.
The $4.7 billion purchase would mark the largest acquisition of a U.S. company by a Chinese corporation. Some 46,000 employees work for the Virginia-based pork processor that is recognized as a leader in production standards and trusted for its food safety throughout the world. Shuanghui plans to import more pork products from the U.S. to meet the demand of Chinese consumers while keeping its operations for U.S. customers in place.
Will Americans who love their bacon come out in force to boycott the Chinese company’s acquisition? Most industry observers believe it won’t matter in the long run, as customers tend to buy familiar brands that are pleasing to the palette rather than looking at country of origin and corporate ownership. In fact, most consumers are unaware who produces the food they buy on a daily basis.
“The general public may latch on to this and say they are going to boycott, go vegan, or otherwise,” said Teri Gault, who runs TheGroceryGame.com. Gault told CNBC that, though some might say they are outraged, “People say a lot more of that than actually do.”
Industry analysts point to a 2007 purchase of Swift & Company as proof that consumers don’t follow up on proposed food boycott as long as the brand names — and the safety regulations already in place — don’t change when they head to the supermarket to go shopping. Swift was purchased by a Brazilian company, which made it the dominant force in animal protein processing. Their business has continued without interruption.
The brands that are a part of Smithfield’s holdings are extensive and include Farmland, Carando,and Gwaltney. It is doubtful many Americans know Smithfield owns those products, so it will require extensive research on the part of consumers to pull off a bacon boycott or another type of pork purge. In other words, don’t expect huge numbers of Americans to renounce pork in favor of organic vegetables any time soon.
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