UPDATE 1-U.S. Senators urge inclusion of food safety in Smithfield review
June 20 (Reuters) - A bipartisan group of fifteen U.S. senators on Thursday urged the Obama administration to consider whether the proposed sale of Smithfield Foods Inc to Chinese meat company Shuanghui International posed any threat to U.S. food safety or food security that could justify blocking the deal.
"We believe that our food supply is critical infrastructure that should be included in any reasonable person's definition of national security," the senators said in a letter to U.S. Treasury Secretary Jack Lew, whose department chairs the interagency panel that reviews foreign investment for national security threats.
Smithfield Foods, based in Smithfield, Virginia, is the world's largest producer and processor of pork. Shuanghui is planning to acquire it for $4.7 billion in what would be the biggest takeover of a U.S. company by a Chinese firm.
"We strongly encourage you to include the Department of Agriculture and the Food and Drug Administration in any CFIUS (Committee on Foreign Investment in the United States) review of this transaction," the senators said.
The group included 15 of the 20 members of the Senate Agriculture Committee, including the Democratic chairman, Senator Debbie Stabenow of Michigan, and the panel's top Republican, Senator Thad Cochran of Mississippi.
They said the Agriculture Committee had not taken a formal position on the proposed sale, but did plan to "further examine how this transaction is reviewed and how these transactions will be reviewed in the future" given the potential for other foreign purchases of U.S. food assets.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, and Senate Finance Committee Chairman Max Baucus, a Montana Democrat, were among the five Agriculture Committee members who did not sign the letter.
The CFIUS review process does not typically include either USDA or FDA. In addition to Treasury, other CFIUS members include the Departments of Justice, Homeland, Security, Commerce, Defense, State and Energy as well as the offices of the U.S. Trade Representative and Science and Technology Policy.
The senators urged Lew to make USDA one of the lead agencies in the Smithfield review and to consider "the broader issues of food security, food safety and biosecurity" posed by the proposed takeover.
They also suggested the U.S. government should require certain safeguards, if the deal is approved, to ensure Shuanghui complies with U.S. food safety and biosecurity standards.
The United States should also ensure taxpayer-supported research and development, and any resulting intellectual property, is "properly safeguarded," they said.
CFIUS could sign off on the deal by mid-July if the companies satisfactorily answer all its questions in an initial 30-day review. However, some expect the investigation will go into a second phase, which could take up to 45 additional days.