SMITHFIELD, Va. (WAVY) - The head of Smithfield Foods Inc. is trying to ease concerns that the pork producer's proposed takeover by a Chinese company would pose risks to the U.S. food supply.
CEO Larry Pope testified Wednesday at a Senate Agriculture Committee hearing on the pending deal with Shuanghui International.
Committee Chairwoman Debbie Stabenow says the proposed purchase of the Smithfield, Va.-based company raises many questions, including the impact on food safety and security.
10 On Your Side's Stephanie Harris listened in on the hearing and reported that everyone there seemed to agree in the short-term the deal sounds good for the U.S. and Smithfield workers. However, the panel had many questions about the long-term.
"Did you realize you were the victim of a Chinese communist plot?" asked Kansas Senator Pat Roberts at the hearing in D.C.
Amidst laughter, Pope replied: "Senator, I did not. To this moment, I'm not sure I'm the victim of a plot."
It may sound funny to some, but others are truly concerned about an American company selling to a Chinese company with government ties.
"How do we ensure our people back home that pork will be available it will be affordable we will still have the kind of controls that I think they hope we will have?" asked Nebraska Senator Mike Johanns.
"We're going to protect these brands and we're going to protect this business, and If we don't, the U.S. inspectors are going to do it anyway," Pope said.
Attendees pointed out some observations to Pope and asked him some tough questions about his financial gain, if the merger goes through.
"I've been with the company over 30 years and have acquired the ownership shares that I have over a long period of time," Pope said. "And the company has done well ... "
Pope told the committee that the deal isn't about importing Chinese pork into the U.S. Instead, Pope says it's a chance to export into new markets with its brands, such as Smithfield, Armour and Farmland.
Others asked why China does not just import pork from America instead of buying the company, if they need pork.
"I think this is the opportunity America has been looking for to import jobs," Pope said.
With China's poor food-safety record and Shuanghui being forced to halt sale of pork in 2011 due to illegal steroid additives, senators raised concerns about the possibility of pork being imported from China to the U.S. via the Smithfield brand.
"It's all about exports," said Pop. "In fact, the Chinese product cannot be imported into the United States today, and they have no plans and no applications in place."
A professor from Dartmouth said the Chinese company buying Smithfield is the perfect solution to IP theft -- instead of China stealing American technology, they would be paying billions of dollars for it.
The deal valued at about $7.1 billion including debt is subject to federal and shareholder approvals. There will be more government investigations before the deal is approved or squashed, but it is expected to close later this year.
Stay with WAVY.com for more on the hearing.
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