Smithfield Sued on COVID-19 Claims

LINCOLN, Neb. (DTN) -- Smithfield Foods, Inc., misled consumers about the state of the meat-supply chain and packing-plant worker safety during COVID-19, a new federal lawsuit alleges, saying the company's public-relations efforts took advantage of consumer fears during disruptions in the food-supply chain.

Smithfield is one of the largest pork-processing companies in the world. The lawsuit filed by Food and Water Watch in Superior Court in the District of Columbia on Monday, alleges Smithfield violated D.C.'s Consumer Protection Procedures Act and "continues to mislead consumers in the District of Columbia about the state of the national meat-supply chain and the company's workplace safety practices."

In the spring of 2020, the meat-supply chain was thrown into disarray as packing plants across the country were forced to close operations to stem the spread of COVID-19.

By some industry estimates about 3 million hogs were not slaughtered on time in the spring of 2020 as processing capacity shrunk. The number of animals euthanized remains largely unknown. By the end of July 2020, hog producers were holding on to about 1.1 million animals that should have been slaughtered.

In April 2020, Smithfield closed its Sioux Falls, South Dakota, pork plant after more than 80 of its 3,700 employees tested positive for COVID-19.

The lawsuit alleges Smithfield "mounted a distinctly aggressive public-relations campaign geared toward leveraging the pandemic" to grow profits.

"First, Smithfield has misrepresented to consumers that a countrywide meat shortage was imminent," the lawsuit said. "This fearmongering creates a revenue-generating feedback loop. It stokes and exploits consumer panic -- juicing demand and sales -- and in turn, provides the company with a false justification to keep its slaughterhouses operating at full tilt, subjecting its workers to unsafe workplace health and safety conditions that have caused thousands of Smithfield workers to contract the virus."

Food and Water Watch alleges Smithfield "misrepresented working conditions" at its packing plants "in an effort to allay heightened consumer concerns" for plant workers.

The group said Smithfield has conducted an advertising and social media campaign to assure consumers that company workers are "protected from the hazards" of COVID-19 and to warn about crimped meat supplies.

"However, Smithfield's messaging could not be further from the truth," the lawsuit said. "To provide just one example on the meat shortage front, Smithfield gravely warned American consumers in April 2020 that the nation was 'perilously close to the edge in terms of our meat supply.' But notwithstanding this warning to domestic consumers that the end was near, Smithfield's foreign exports were surging -- with multiple studies showing the company's pork exports to China hitting record highs that same month.

"Government data further refute Smithfield's doom-and-gloom warnings, showing that pork inventory held in 'cold storage' warehouses was well into the hundreds of millions of pounds, which analysts have estimated could have kept grocery stores stocked with pork for months, even absent any additional production."

Food and Water Watch has asked the court to issue an injunction against Smithfield.

"In all, Smithfield chose to leverage the pandemic to its advantage," the lawsuit said. "It stridently beat the drum on issues of enormous significance, exploiting consumers' fears about meat shortages and assuaging their concerns about workplace safety. And while the company's campaign on these fronts has no doubt benefited its business, it is built on a series of egregious misrepresentations, deceptions and falsehoods."

NPPC RESPONSE

The National Pork Producers Council said in a statement to DTN more than 40% of pork-production capacity was down last year during the peak of the COVID-19 shutdown.

"Hogs were backing up on farms," NPPC said. "Hog farmers were resourceful and did everything they could to get market-ready hogs into the food supply. Unfortunately, many were forced to euthanize pigs to prevent suffering due to overcrowding on farms. The risk of a pork shortage was very real."

As a result of last year's disruption to the meat supply chain, there have been calls to expand harvest capacity. In addition, a recent federal court order striking down higher line speeds at processing plants goes into effect at the end of June.

An analysis by industry economist Dermot Hayes of Iowa State University, found reducing line speeds will cut overall pork-harvest capacity by about 2.5%. "Impacted plants will lose as much as 25% of capacity," NPPC said. "Hog farmers, particularly smaller producers, will lose more than $80 million this year alone."

The NPPC said exports were key in helping the pork industry to stay afloat during the COVID-19 shutdown.

"With the shutdown of the foodservice market, the dramatic reduction in harvest capacity and the related backup of hogs on farms," NPPC said in a statement, "it made sense to keep moving market-ready hogs into the global food supply in any way possible. In many cases, these exports were in the form of whole carcasses. This was significant during the crisis in that it helped the industry maximize the number of hogs moved into the food supply, while minimizing the labor required to do so."

Read the lawsuit here: https://www.publicjustice.net/…

For more DTN coverage:

"Hog Farmers Could Face $5 Billion Loss" https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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