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Poultry Merger Challenge

by Gregory E. Heltzer and Carrie G. Amezcua On May 10, the U.S. Department of Justice (DOJ) filed a civil lawsuit against George's Inc. to block its $3M acquisition of Tyson  Foods Inc.’s, Harrisonburg, Virginia chicken processing plant, showing that deals of all sizes face scrutiny.  This case also continues the trend of challenges to non-reportable transactions by both the DOJ and FTC, as well as the DOJ's current focus on the agriculture sector. It is also notable because the DOJ is alleging that the merger leads to monopsony power, a relatively rare allegation, but one that is increasingly used in challenging deals in the agriculture business. The DOJ began investigating the acquisition when it was announced in mid-March, and issued Civil Investigative Demands to the parties on April 18, 2011.  Despite their awareness of the DOJ’s concerns and ongoing data and document productions, the parties consummated the deal. George's...

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Proposed GIPSA Rule

by Carrie G. Amezcua Earlier this week, The Tribune (Greely, Colorado) published the article below discussing proposed changes to livestock marketing rules.  The article discusses the pros and cons of the Grain Inspection, Packers and Stockyards Administration proposed rule - commonly referred to as the GIPSA rule.   "New rules were mandated by the 2008 Farm Bill, which required the U.S. Department of Agriculture to conduct rulemaking that 'improves fairness in the marketing of livestock and poultry.'" The rule aims to promote fairness and transparency, and would make it easier for a plaintiff to bring a case under the Packers & Stockyards Act by no longer requiring that the plaintiff  first show harm to competition in a complaint alleging certain unfair trade practices.  However, critics say that the changes will promote unnecessary litigation and would result in anywhere from 22,800 to 104,000 jobs lost. Comments on...

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Antitrust and Agriculture: Summary of DOJ/USDA Workshops and New Article on Capper-Volstead

by Greg E. Heltzer, Carrie G. Amezcua and Jennifer L. Westbrook The DOJ and USDA just completed a series of five workshops on competition in the agriculture industry.  The two agencies have a renewed their focus on competition in this industry and have promised more activity in this area.  The highlights from each of the workshops is described below. An overview of all five workshops: Issues of Concern to Farmers, March 12, 2010, Iowa Opening statements and roundtable remarks by Attorney General Eric Holder, Assistant Attorney General Christine Varney and Secretary of Agriculture Tom Vilsack. There was discussion about concentration in the seed industry and lack of choice among seed trait companies.  Also, farmers voiced concern about patents that nearing expiration where there are no generics yet in the pipeline.  (Subsequent to this workshop Monsanto announced it would pay for all regulatory approvals of Round Up Ready soybean patent through 2021 even...

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