ORGANIZATION FOR COMPETITIVE MARKETS

P.O. Box 6486

Lincoln, NE 68506

Web site: www.competitivemarkets.com

e-mail: ocm@competitivemarkets.com

Date: June 15, 2001 For Immediate Release

Contact: Fred Stokes: 662-476-5568

Doug O’Brien: 860-379-6199

DELAWARE JUDGE ORDERS TYSON TO PURCHASE IBP; RULING PUTS CONSUMERS AND INDEPENDENT PRODUCERS AT RISK SAYS OCM

The Organization for Competitive Markets (OCM) reacted with disgust to a Delaware court’s ruling today that requires Tyson Foods, Inc. to follow-through on its agreement to purchase IBP, Inc. The deal would merge the country’s largest poultry producer and processor with the country’s largest processor of red meat.

Tyson announced on Jan. 2 a deal to purchase IBP after a heated bidding war with Smithfield Foods, Inc., the nation’s largest pork producer and processor. But Tyson announced that it planned to back out of the agreement on March 29, alleging IBP accounting irregularities. IBP sued Tyson to require it to complete the agreement. Some industry observers believe that Tyson may pay IBP to get out of the deal.

“If Tyson completes the acquisition, the new mega-meat company would control 30 percent of the beef market, 33 percent of the chicken market, and 18 percent of the pork market,” said Fred Stokes, president of the OCM. “How are farmers supposed to sit at the bargaining table with a firm so big that it is the major player in beef, pork, and poultry?”

“Consumers also should be concerned,” added Stokes. “There’s no doubt this deal will restrict their choices at supermarkets. And given the concentration of firms in food retail, its likely that if a new major meat firm raises prices to retailers, the retailers will simply pass on the price increase to consumers.”

“Considering the business philosophy of Tyson, farmers are worried about the specter of total vertical integration in hogs and cattle, where there’s no room for the independent producer,” said Doug O’Brien, associate counsel for OCM. Tyson is notorious for engineering the industrialization of the poultry sector and egregious contracting practices with farmers.

“Consumers may even have more reason to be alarmed by the Tyson deal because of Tyson’s already dominant position in poultry,” added O’Brien. The great fear is that Tyson will be able to leverage its market power in the markets of beef, poultry, and pork, to raise retail prices, limit consumer choices, and foreclose competition.

The Organization for Competitive Markets is a multidisciplinary, nonprofit group of farmers, ranchers, academics, attorneys, and policy makers dedicated to reclaiming the agricultural marketplace for independent farmers, ranchers and rural communities.

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