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IOWA FEDERAL JUDGE OVERTURNS
STATE LAW BARRING CORPORATE
PORK PROCESSORS FROM OWNING OWN HOGS
JERRY PERKINS, DES MOINES REGISTER: A federal judge in Des Moines on
Wednesday struck down an Iowa ban that prevents pork processors from owning hog
operations, saying the state law violates the commerce clause of the U.S. Constitution.
The ruling by Judge Robert Pratt in a case involving Smithfield Foods Inc.,
the world's largest
pork producer and processor, drew immediate criticism from farmers and politicians.
If the decision withstands an appeal, it would undermine decades of efforts
in Iowa to protect
small farmers from competition from conglomerates and it would open the way for further
consolidation in agriculture.
"This ruling can only be viewed as devastating to family farmers in
Iowa," said Curtis Meier, a
hog producer from Clarinda who is president of the Iowa Pork Producers Association. "The
Iowa law, first adopted in 1975, was intended to allow packers to be packers and let farmers
The case emphasizes the "urgent need for Congress to pass . . . a nationwide
ban on packer
ownership of livestock," said Sen. Tom Harkin, Dem-Iowa. Richard Poulson, Smithfield's
executive vice president and general counsel, disagreed. "Restrictive laws do nothing more
than harm the people they are designed to protect," he said.
Smithfield's lawsuit was the first constitutional challenge to Iowa's
corporate farm law, which
was passed in 1975. The law was amended in 1988 and again last year to ban packer financing
of livestock operations.
In the ruling, the judge said he "deeply sympathizes with Iowa's attempt to
protect its family
farmers," but added, "the evidence makes clear that the State enacted (the corporate ban) with
an eye towards nothing more than protecting local economic interests from out-of-state
behemoth Smithfield Foods."
The packer ban "unconstitutionally discriminates against out-of-state
interests in favor of local
ones," Pratt wrote. "The statute blatantly protects the rights of Iowans to engage in conduct
forbidden to out-of-state entities," including Smithfield.
Smithfield and two related hog producers in Iowa, Murphy Family Farms and
Prestage-Stoecker Farms, sued the state after Smithfield acquired Murphy, a nationwide
company with sizable hog operations in Iowa, three years ago. Murphy tried to sell its Iowa
hog operations to Prestage-Stoecker, but Iowa Attorney General Tom Miller called that sale a
"sham" and moved to block the Murphy sale.
Smithfield's Poulson said: "We believe our system" of raising hogs on
contract with farmers
"will be best for Iowa and will do more to preserve the family farm in Iowa."
Attorney General Miller said he was disappointed by Pratt's ruling and expects to appeal it to
the 8th Circuit Court of Appeals.
"We argued strongly that Iowa's law is constitutional, that it makes no
in-state and out-of-state swine processors, and that the Legislature's stated purpose - "to
preserve free and private enterprise, prevent monopoly, and also to protect consumers" - is
legitimate and not discriminatory," Miller said.
Smithfield, with headquarters in Smithfield, Virginia, has annual sales of $8
billion, produces 12
million hogs a year, and processes 20 million hogs annually.
Its challenge to Iowa's corporate farm law pitted the powerful, multinational
the leading hog-producing state in the country. There were 15.3 million hogs on Iowa farms
in December, according to the U.S. Department of Agriculture, or about one-quarter of the
U.S. swine inventory. Iowa packing plants slaughter more than one-quarter of the hogs in the
The case spotlighted a national debate over the structure of agricultural
production and states"
attempts to ensure that independent producers can compete against giant, vertically integrated
corporations such as Smithfield, which raises 60% of the hogs it slaughters. Miller said the
ruling shows the need for Congress to pass a national ban
on packers owning hogs.
"Congress has clear authority to act, and to act in all states," Miller said.
"It should do so
now." In its complaint against the Iowa law, Smithfield said its vertical ownership of hog
production and processing allows it to maintain "a high degree of quality control . . . to
produce a consistently excellent line of value-added pork products and processed meats for
national and international consumption."
Smithfield's lawyers argued that the Iowa law banning packer ownership of
to taking property without just compensation. The law also discriminated against Smithfield
because cooperatives and other businesses with more than 60% farmer ownership are exempt
from the ban, the pork processor argued.
The Iowa law prohibits beef or pork processors from owning, controlling or
livestock operations. It also says that a processor cannot enter into contract feeding
arrangements with Iowa hog producers. Companies were granted two years to comply with
Iowa is one of nine Midwestern states that enacted statutory limitations on
ownership can be structured. The Iowa law has been used as a model for other state laws.
A federal court in South Dakota on May 16 overturned a similar state
law, calling it
unconstitutional for different reasons from those argued by Smithfield. The decision has been
appealed to a federal appeals court in St. Paul, Minnesota.
A similar ban on packers owning livestock was contained in a version of the
farm bill that
passed the U.S. Senate, but the ban was dropped from the final version because of opposition
in the U.S. House. Both of Iowa's senators --- Republican Charles Grassley and Democrat
Harkin --- support a national ban. Grassley has said he will re-introduce legislation banning
packer ownership of livestock this year.
USDA SEEKING TO SHUT DOWN
NEBRASKA BEEF LTD. AFTER
NUMEROUS FOOD SAFETY VIOLATIONS
ELIZABETH BECKER, NEW YORK TIMES: After a year of record recalls of
suspected of contamination, the Bush administration is asserting its legal right to seek the
shutdown of an Omaha slaughterhouse for repeated violations of food safety rules.
The Agriculture Department . . . argue[d] in Federal District Court on
Thursday that the plant,
Nebraska Beef Ltd., should be effectively shut down after numerous citations for unsanitary
conditions. The investigation last August of the Omaha slaughterhouse was sparked by the
discovery of hamburger contaminated with E. coli 0157:H7, some of which was supplied by
Saying it would lose $2.7 million each day of a suspension and be driven out
Nebraska Beef won the first round in the case last week, convincing Judge Joseph F. Bataillon
of Federal District Court that economic considerations outweighed what the company called
the government's questionable accusations and authority. Judge Bataillon issued a temporary
restraining order against the suspension.
Consumer advocates and members of Congress have warned that the case reveals
weakness in the system; the government's inability to enforce health safety rules in the meat
and poultry industry. They argue that the Agriculture Department will need new, explicit
powers from Congress before the department can enforce rules strict enough to combat
bacterial contamination of raw meat in the nation's slaughterhouses.
"This is an extraordinary case because it shows, bottom line, that the
U.S.D.A. has no real
authority to close a plant, even one with gross violations," said Carol Tucker Foreman,
director of the Food Policy Institute of the Consumer Federation of America.
Ann M. Veneman, the secretary of agriculture, would not comment on the
pending case. She
is planning to announce proposals to bolster her department's budget for food safety programs
on Thursday, money that would add new inspectors and more surveillance and microbiological
For the administration, victory in the Nebraska Beef case would answer
critics who have
accused the Agriculture Department of failing to take aggressive action to improve meat safety
after last year's recalls of tens of millions of pounds of meat and poultry, some after deaths
from food-borne illnesses.
"We have to win," said one senior official at the Agriculture Department who
anonymously because the case is pending. "When you are finding repeated food safety
violations that is an indication that the plant is deficient and we have to be able to remedy
that." Officials at Nebraska Beef did not return telephone calls about the case.
But in briefs filed with the court, the beef packing company argued that a
suspension of the
plant's operation would cause irreparable damage to the company's reputation.
"Once a company's quality image has been damaged, if it is ever repaired, it
takes years; the
length of time Nebraska Beef Ltd. does not have," said Michael Thatcher, senior vice president
for sales at the company.
This is not the first time inspectors have found fault with Nebraska
Beef. In confidential
reports over the past three years, the company has received regular citations from federal
inspectors for failing to comply with safety rules. These include three citations for the
discovery of fecal material on carcasses. One dated October 15, 2001, stated that an inspector
found "visible fecal material on the neck, armpit, underneath the foreshanks, and underneath
the brisket area of two carcass sides."
Congress has debated putting more teeth in the inspection system for the past three years.
Senator Richard J. Durbin, Democrat of Illinois, said today that he would
legislation with Senator Tom Harkin, Democrat of Iowa, to restore the power of the
Agriculture Department to "exercise a range of options --- from imposing fines to suspending
operations --- when they find that a plant is contaminated."
"Our scientific inspection system should be a watchdog, not a lap dog," Mr.
Durbin said. "We
are not doing enough to protect consumers and families."
Mr. Durbin first introduced his legislation in 2000 after the Agriculture
Department was told
by a federal court that existing law did not allow it to close the Supreme Beef plant in Dallas
even though its ground beef failed tests for salmonella three times in one year.
Dan Glickman, the secretary of agriculture during the Clinton administration,
fought that case
and said in an interview that it demonstrated "a serious gap in the law. We tested our authority
and we lost," he said. "Now it is up to Congress to correct it and see it as a matter of high
priority for public health."
SARA LEE DOUBLES PROFITS,
BLAMES MEAT SALES DECLINE
ON "HIGHER COMMODITY COSTS"
ASSOCIATED PRESS: The Sara Lee Corporation said today that it more
than doubled its
profit in its fiscal second quarter, helped by cost savings from its restructuring and a favorable
comparison with a difficult period a year ago.
Net earnings were $348 million, or 42 cents a share, in the three months
ended December 28,
up from $160 million, or 20 cents a share, a year earlier. The year-earlier total was reduced by
$143 million, or 17 cents a share, to reflect costs associated with its restructuring. The latest
results matched the estimate of analysts surveyed by Thomson
Revenue climbed two percent, to $4.78 billion from $4.69 billion.
Sara Lee, whose products range from Hanes underwear to Ball Park hot dogs,
gains in its meats and household products divisions offset a down quarter for baked goods. It
said the bakery business, which it also expects to show lower profit in the current quarter, is
under pressure from weakness in the fresh-bread market, where its sales fell by more than
three percent despite success with new products.
Meat sales declined two percent from a year earlier, partly reflecting higher
but operating income increased aided by changes in the company's two-year restructuring
The company said its profits would have been higher if it had not stepped up
promotional spending by 14% to back new products.
MCDONALD'S REPORTS FIRST
QUARTERLY LOSS SINCE 1965
NEIL BUCKLEY, FINANCIAL TIMES: McDonald's on Thursday announced its
quarterly loss since going public in 1965, and scrapped its double-digit earnings growth
The world's largest hamburger chain said it was closing 719 underperforming
mainly in the U.S. and Japan --- more than previously expected --- as it battles to reverse
falling same-store sales.
A $810.2m one-off charge relating mainly to the store closures and the cost
from three foreign markets pushed the company well into the red The net loss was $343.8m,
or 27 cents per share --- much bigger than guidance last month of a 5-6 cents loss --- against
a profit of $271.9m, or 21 cents, a year earlier. Before exceptional charges, McDonald's made
a net profit of 25 cents a share.
McDonald's is suffering from a price war in a stagnant U.S. eating-out
market, while still
attempting to recover from customer complaints about falling standards of food and service.
The fourth-quarter results underlined the task faced by Jim Cantalupo, who
took over from
Jack Greenberg as chief executive at the start of the year, in turning round the sales
Analysts welcomed Mr Cantalupo's adjustment of McDonald's growth targets,
towards a pledge to seek "reasonable growth that creates shareholder value".
"Considering the size and nature of our business, a 10-15 per cent earnings
per share growth
target is not realistic," he said.
Investors and analysts had reacted badly to a conference call last week, when
said McDonald's was still a "growth" company, and should not be considered merely a "cash
Some analysts have called for it to slow expansion of the McDonald's brand,
and use its
cashflow to fund expansion of new formats, such as its investments in Chipotle Mexican Grill
and the Pret A Manger sandwich chain.
McDonald's reiterated its commitment to its controversial "dollar menu" --- a
range of items
for $1 each that has stoked the US price war.
But it said it would examine what products should be on the menu ---
particularly the Big 'N
Tasty burger, similar to rival Burger King's Whopper. It admitted sales of its "signature" Big
Mac and Quarter Pounder burgers had been hit as customers traded down to the cut-price
Systemwide sales, including company-owned and franchised stores, rose 4 per
$10.5bn. Company revenues, including sales from company-owned restaurants and royalties
from franchisees, rose 3 percent to $3.9bn.
But comparable sales, excluding new outlets, were down 1.4 per cent in the
US, 1.9 per cent
in Europe, and6.1 per cent in Asia, Pacific, the Middle East and Africa. Only Latin America
posted positive comparable growth of 11.2 per cent.
ADM BLAMES 13% FALL IN PROFITS
ON "MEAT GLUT" AS DEMAND FOR FEED FALLS
MICHAEL MCHUGH, DOW JONES NEWSWIRES: The glut of meat that has caused
producers to cut production hurt fiscal second-quarter earnings of food processing giant
Archer-Daniels-Midland Co. (ADM) as demand for the feed it produces fell.
The Decatur, Ill., company said profit in the period ended December 31 fell
13% to $131.2
million, or 20 cents a share, on revenue of $7.81 billion.
The average analyst estimate compiled by Thomson First Call had the company
cents a share. Archer-Daniels said second-quarter results included a two-cent-a-share boost
from the partial settlement of a lawsuit. "It's pretty much as expected," said Christine
McCracken, analyst at Midwest Research. She doesn't own shares of Archer-Daniels, nor does
Midwest have investment banking operations.
Archer-Daniels said one of the main factors behind the drop in earnings in
its second quarter
was weaker oilseed crushing margins, meaning the difference between the cost it paid for
soybeans and the price the company received for the processed products - soybean meal and
oil --- derived from the beans. "Meal demand has dropped off," she said.
An oversupply of meat, which in turn has forced cattle, pig and chicken
farmers to cut back
production, has led to a decline in the price of meal that is used in animal feed.
While soybean prices soared last year due to the drought affecting many key
the increase wasn't nearly as much as some had expected earlier in the year, and likely not
enough on its own to upset North American crushing margins, McCracken said. Furthermore,
bean prices, as measured on the Chicago Board of Trade, are down about five percent from
the 2002 peak in September while meal prices are off ten percent from the highs.
In response to the weaker crush margins, Archer-Daniels said last month it
soybean crush rates at several locations through a combination of plant closures and cutbacks
"That will help correct the situation to some extent," McCracken said.
However, she noted
that "over the very near term, the situation isn't likely to improve."
Operating profit in its oilseed processing segment fell 22.6% to $102.7 million.
Archer-Daniels shares recently traded at $12.48, down 12 cents, or one
percent on volume of
186,000. Average daily volume is1.4 million shares.
Reflecting the difficult operating conditions in U.S. agriculture markets,
higher wheat costs
caused by the drought sent operating profit at Archer-Daniel's wheat processing segment
down 40% to $18.8 million.
Operating profit at its agriculture services division plunged 53% to $35 million.
As a measure of the higher input costs for Archer-Daniels, cost of goods sold
as a percentage
of sales rose to 93.7% from 90.7% a year earlier.
But there were some bright spots. Higher demand for ethanol, signaling
greater use of the fuel
additive, helped push operating results in its corn processing unit up 53% to $71.3 million.
In its "Other" business, operating profits rose 23% to $69.5 million. The
company said, the
better results were driven primarily by its bioproducts, cocoa and other international business
--- growth areas for the company. Bioproducts are additives used to improve the protein and
nutritional value of food and animal feeds, for example. Analysts were surprised by these
"The areas that need to grow to overcome what has been a very difficult North
soybean crushing environment are working out for them," said analyst Leonard Teitelbaum, of
Merrill Lynch & Co. Archer-Daniels' results were one cent a share higher than he predicting
for the quarter.
Teitelbaum doesn't own shares of Archer-Daniels, but Merrill Lynch and
own one percent or more of the company. It has also received or intends to seek
compensation for investment banking. Merrill or an affiliate was a manager of a public offering
in the stock within the past 12 months.
McCracken, the analyst at Midwest Research, is interested to find out on the
conference call later Friday morning how its cocoa operations improved in light of the
continued unrest in the Ivory Coast.
Analysts will be looking to find out how pricing and contracts for high
fructose corn syrup
with U.S. soft drink makers are going. On its first-quarter earnings conference call in October,
the company said it was looking for "substantially" higher increases in the sweetener. One
analyst said increases could be in the 10% to 15% range --- up from earlier predictions of eight
percent to ten percent gains.
The company failed to give what many analysts were most looking for:
increases on its high fructose corn syrup (HFCS) contracts.
Speculation is for significant jumps, perhaps by double-digit percentages, in
negotiations with soft drink makers. But the company said that only a little more than half of
the contracts based on volume have been concluded, so it could not reveal pricing on its
sweetener. "We know the direction is going to be up, but we're not at liberty to say," said
He did acknowledge an analyst's observation that the longer negotiations
continue the more
likely it is that both sides are digging in. He said that if they had settled all contracts by
January 1, Archer Daniels likely would have not received high enough prices for the
Plaguing the company's HFCS operations is the ongoing trade dispute with
Mexico. A 20%
tax on soft drinks made with HFCS last year effectively shut down some HFCS operations in
Mexico for a couple of U.S. companies.
Archer Daniels Chief Executive G. Allen Andreas was optimistic that a
solution could be
found, despite few recent signs of improvement. He said it's in both sides' best interest to solve
the impasse: Mexico would get higher prices for its surplus sugar if it were able to sell it in the
U.S., rather than on the open market, and U.S. companies would be able to restart HFCS
operations in Mexico.
The dispute is over how much surplus sugar Mexico can import into the U.S.
The soft drink
tax was seen as retaliatory and an effort to protect the ailing Mexican sugar industry.
Meanwhile, Andreas was challenged on the statement he made in the earnings
Archer Daniels continues to produce value for its shareholders.
An analyst questioned the value he had created since becoming chief executive
in 1997. That
year, the company's stock price peaked at around $20. It has not been near there since.
Andreas said efforts to diversify the company by broadening its geographic
base and product
offerings has made the company stronger. "We would not have produced the results that we
did this quarter" if it were the same company it was five years ago, he said. Andreas said the
company has been shifting its asset base to better match changing production and demand
patterns. In oilseed production, for example, South America has taken overtaken the U.S. as
the biggest producer of soybeans.
The company said that, ten years ago, about 75% of its crushing activities
were in the U.S., a
figure that has slid to less than 50%.The company has closed some U.S. processing facilities,
and said last month that it was reducing capacity at some U.S. plants in response to changing
HIGH DEMAND, HIGH PRICES
FOR ETHANOL PREDICTED BY ADM
MICHAEL MCHUGH, DOW JONES NEWSWIRES: Agribusiness giant Archer Daniels
Midland Co. (ADM) expects demand for the fuel additive ethanol will hit 2.7 billion gallons in
2003 and prices will rise.
On a conference call with analysts and investors, the company said that
current capacity is
sufficient to meet demand, but it acknowledged that recent weaker prices may suggest some
overcapacity on a spot-market basis.
Archer Daniels,which has about 45% of the current ethanol market, said a
decision in January
by Chevron Texaco Corp. to phase out rival fuel additive MTBE, or methyl
tertiary-butylether, and replace it with ethanol in gasoline sold in California by May, should
help equalize supply and demand and support higher prices going further. Demand for ethanol
from Chevron is estimated at around 84 million gallons. . . .
In its fiscal first quarter conference call in November, Archer Daniels
demand to be about 2.4 billion gallons, up from 2.1 billion in 2002. But Larry Cunningham,
Archer Daniels' senior vice president of corporate affairs, said Friday that Chevron's decision
to phase out MTBE helped boost demand expectations.
Most of the company's ethanol contracts are for six months, and Archer
Daniels will be
entering a new pricing period in April. In response to an analyst's question, Cunningham
acknowledged that almost all of the company's ethanol capacity will be sold out and at higher
prices after April."The market fundamentals look like we should be able to do that," he said.
UK'S CORPORATE FEEDING FRENZY
AS SIX COMPANIES SEEK TO PURCHASE
BRITISH SAFEWAY LTD SUPERMARKETS
DEBORAH BALL, JAMES R. HAGERTY, AND ROBIN SIDEL, THE WALL
STREET JOURNAL: The battle to take over British grocery chain Safeway PLC has
become a supermarket free-for-all.
In what is beginning to resemble an eBay auction more than a conventional
corporate-takeover fight, a sixth potential bidder emerged to take over Safeway.
This was already one of the most complicated takeover battles ever, even
before the news that
Tesco PLC said it is considering a bid. Safeway is Britain's fourth-largest grocer, with a
current market value of about £3.4 billion ($5.50 billion, €5.13 billion). Tesco is Britain's
biggest supermarket chain. Tesco joins five other potential buyers that have declared an
interest. Tesco didn't name a price but said it would be "compelling."
Some of these contenders may never actually make formal bids, however,
competition authorities threaten to block them. It could turn out to be "a phony war" with
only one or two serious bidders, warned David Cumming, a fund manager at Standard Life
Investments, in Edinburgh, Scotland.
Phony or otherwise, the war already involves a massive deployment of bankers
from around the world. Advising Tesco are Deutsche Bank AG and the boutique U.S.
investment bank Greenhill & Co. That brings to 11 the number of banks and securities firms
identified as advisers to the various bidders. Of last year's ten top advisers on mergers and
acquisitions in Britain, as compiled by Dealogic LLC, only three haven't yet been named as an
adviser on the Safeway auction: Morgan Stanley, N.M. Rothschild & Sons and J.P. Morgan
Chase & Co. And some of those firms still may join the fray, either as advisers or lenders.
More-interested parties may soon be needing advice. Texas Pacific Group, a
also is considering whether to bid, according to a person familiar with the situation.
Until 1987, Safeway PLC owned by Safeway Inc. of Pleasanton, Calif.,
which runs Safeway
stores and other chains in the U.S.; the companies now are separate.
With few major takeover deals being done in either the U.S. or Europe, it is
embarrassing for bankers not to be involved in the fray. Spokesmen for Morgan Stanley, J.P.
Morgan and Rothschild declined to comment on whether they felt left out of the action.
Meanwhile, the proliferation of bidders and potential bidders is creating
conflicts of interest for
some bankers. On Wednesday, Tesco temporarily suspended Merrill Lynch & Co. from acting
as its corporate broker because Merrill is advising British retailing entrepreneur Philip Green,
who is considering making his own bid for Safeway. (In Britain, corporate brokers advise
companies on such things as securities offerings and investor relations.)
Last week, Credit Suisse Group's Credit Suisse First Boston resigned as
corporate broker to
Safeway --- breaking up a ten-year relationship --- so it could instead advise the buyout firm
Kohlberg Kravis Roberts & Co. on a possible bid for the grocer.
The advisory work comes as a relief to bankers who have been starved for
"There is a lot of pressure on individual bankers to generate some fees," said Neil Austin, a
corporate finance expert at KPMG in London. "You want to get into this deal because there
won't be many of this size in the U.K."
All of the bankers providing advice on Safeway won't necessarily be paid for
however. Companies often agree to pay bankers for such advice only if a bid is successful.
Even so, the current battle gives underemployed M&A bankers a chance to flex their brains
and build relationships that may pay off in future deals.
For a few banks, the deal should be lucrative. Since January 2000, deals
valued at between $5
billion (€4.67 billion) and $10 billion, including debt, generated investment banking fees of an
average 0.27% of the deal's value, according to Dealogic. That means that the financial adviser
to the winning bidder for Safeway is likely to reap fees of about $20 million.
That is a hefty sum, particularly in today's mergers-advisory drought, but it
comparison to, for example, the $110 million earned last year by Comcast Corp.'s multiple
bankers for advice on the $30 billion acquisition of AT&T Corp.'s cable business.
Meanwhile, Safeway's advisers will also be sitting pretty, especially since
the company's sale is
virtually assured. Deals of this size since January 2000 have generated advisory fees from the
target company of an average 0.38%, according to Dealogic. That means HSBC and
Citigroup Inc.'s Salomon unit will likely split a fee of at least $25 million for advising Safeway.
Also feeding this frenzy is the attraction of Safeway as a target. In a
country where it is
difficult to get planning permission to open new stores, the acquisition of Safeway's 479 outlets
--- or even a small portion of them --- offers one of the few ways to gain market share quickly.
The battle opened two weeks ago when William Morrison Supermarkets PLC, the
chain, agreed to buy Safeway for shares currently valued at about £2.5 billion. Then the
country's No. 2 and 3 chains --- J Sainsbury PLC and Wal-Mart Stores Inc.'s Asda --- both
said they were interested in buying Safeway, if they could get clearance from competition
authorities. KKR and Mr. Green soon declared their own interest in buying all or part of
It was widely assumed that Tesco wouldn't have a chance to win approval from
competition authorities to buy Safeway because Tesco already has a 25% share of the market.
If it grabbed Safeway's ten percent share, Tesco would hog more than a third of the market.
But Tesco argued Wednesday that it could make a case that consumers would benefit from
having more of its low-price offerings and signaled that it would be willing to sell a quarter of
Safeway's stores to satisfy the authorities.
Morrison accused rival grocers of stepping in merely to thwart the friendly
Morrison and Safeway, which would create a big competitor for Tesco, Sainsbury and Asda.
In the end, competition authorities are considered likely to block any deal
that concentrates the
market into three strong market participants. But if the competition commission does approve
a redrawing of the grocery map, Tesco and the other big grocers want to have a seat at the
negotiating table. "The authorities are being asked to consider a major restructuring of the
industry," said Tesco's chief executive, Terry Leahy. "It's important that they hear our case."
Few bankers are likely to disagree with that.
BLACK FARMER WINS $6.6 MILLION
DISCRIMINATION CASE AGAINST USDA
ASSOCIATED PRESS: The Agriculture Department will pay a black farmer
$6.6 million for
discriminating against him, officials said [Friday].
Officials had been considering for a month whether to appeal a judge's order
that the agency
pay the farmer, Will Sylvester Warren of Southampton County, Virginia for 17 years of
A spokeswoman for the department, Alisa Harrison, confirmed that it would pay
but added that officials were reviewing other aspects of the decision, by a law judge in the
Department of Housing and Urban Development, Constance T. O'Bryant,to ensure that it did
"not violate any of the laws under USDA.authority."
Mr. Warren, 77, did not immediately return calls for comment.
Groups of black farmers said the decision to pay Mr. Warren gives them hope
Agriculture Department, along with the judges, adjudicators and arbitrators who hear their
cases, will be more sympathetic.
"I think this opens up the door to give all of those people a fair trial,"
said John Boyd, head of
the National Black Farmers Association.
Thousands of black farmers said in a class-action suit, Pigford v.
Glickman, that they had
routinely been denied loans because of their race. As part of a settlement for the case in 1997,
the Agriculture Department agreed to let farmers seek $50,000 settlements in cases where the
government determined that it had discriminated. Washington has paid $634 million in 12,690
cases and denied 8,540 cases.
Mr. Warren chose to remain out of the settlement and sought a judgment.
Many black farmers are upset with the results of the accord, saying the
Department did not discipline the loan agents accused of discrimination and unfairly rejected
thousands of cases.
Tom Burrell of the Black Farmers and Agriculturalists Association said he
wanted the Bush
administration to throw out the settlement and start anew.
Citing the judgment in the Warren case, Mr. Burrell said, "If that's not a
basis for someone to
revisit this decision of this lawsuit called Pigford, I don't know what is."
Preparing to post this year-end 219th edition of THE AGRIBUSINESS EXAMINER it
gratifying to know that over 1100 people throughout the world are currently receiving it on a
regular basis and judging from comments received feel it is a valuable source of information.
However, it is also quite troubling to realize that less than 4.5% of that readership has ever
seen fit to make any contributions toward its continued existence.
To that small cadre of contributors this editor can only express his profound
appreciation for I realize that in some cases even a small donation was a sacrifice for them.
From the outset it was never the purpose of THE AGRIBUSINESS EXAMINER to
charge a subscription fee for the original intention of this newsletter was to get it into as many
hands as possible as a vehicle for monitoring corporate agribusiness from a public interest
perspective, just as was the establishing of a web site
to provide facts, background, analysis and educational information on corporate agribusiness.
Thanks to the generosity and creativity of the editor's oldest son David and
colleagues at ElectricArrow in Seattle, Washington that sight is being maintained on a virtual
pro bono basis.
Having said all this, may I repeat CONTRIBUTIONS FROM READERS are always and
always be most welcomed for editors of such publications as THE AGRIBUSINESS
EXAMINER can not always live on bread and water alone. Such checks made out to A.V.
Krebs can be sent to P.O. Box 2201, Everett, Washington 98203.