Tyson-Hillshire Merger: An Antitrust Concern?

Iowa Senator Chuck Grassley and a number of meat industry observers have called for close antitrust scrutiny by the U.S. Dept. of Justice of Tyson Foods’ announced purchase of Hillshire Brands. While scrutiny of mergers is always a good idea, does this merger really pose a threat to markets or is this simply a knee-jerk, pro forma complaint about change?

In any antitrust matter, the primary concern is defining the relevant market. In this case, both the output and input facets of Tyson’s and Hillshire’s businesses would be of concern.

The two companies both sell meat products but I think it would be difficult to argue that they sell in common markets. Hillshire sells, almost exclusively, further processed, branded items. Tyson does some of that, especially in its chicken business, but it sells far more fresh, unprocessed wholesale pork and beef cuts, many of which go to companies just like Hillshire.