China continues to be in food industry news this week with a takeover of Smithfield Foods, the world's largest pork producer, by a Chinese firm, Shuanghui International Holdings, Ltd.
Smithfield's shareholders approved the company's sale to Shuanghui for a reported value of $4.72 billion on Tuesday. The deal is expected to close on Thursday, making it the largest takeover of a U.S. company by a Chinese firm.
Why is China getting in on American pork? In the wake of several Chinese food-safety scandals --earlier this year 46 people were sentenced to jail for selling unsafe pork from sick pigs, at the same time that thousands of pigs were being dumped into the Huangpu river --many Chinese have begun to seek out foreign products instead of food produced nationally.
Shuanghui is said to be using the sale to take advantage of Smithfield's American reputation to reshape and improve the Chinese pork industry.
However, the economic benefits of bringing Smithfield under Chinese controlcan't be denied; Chinese consumers spend $183 billion per year on pork products. The acquisition provides Shuanghui with access to more advanced technology, as well as 460 farms, responsible for raising 15.8 million hogs a year.
Unfortunately, the potential consequences for American consumers aren't are positive. China has been in the hot seat lately when it comes to food; it was recently announced that unlabeled chicken from China would be approved for sale in the U.S.
Smithfield CEO Larry Pope has said that the sale of his company does not necessarily mean that Chinese-produced pork will be be sold to the U.S.
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