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Wake Up and Haul the Bacon
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<p><span style="font-family:verdana,geneva;font-size:small;">Just to be clear, I don’t expect China to acquire Smithfield and immediately begin importing Chinese pork to the U.S. I agree that would be a disaster for their acquisition of Smithfield. But in the long run, some degradation of the Smithfield brand might be an acceptable price to pay for boosting the Shuanghui brand in China. </span></p> <p><span style="font-family:verdana,geneva;font-size:small;">It depends on what China is seeking with the acquisition. On the face of it, this is China outsourcing pork supply. At a deeper level, this is China acquiring the technology to improve their own pork production. At still another level, this is China improving the brand of Shuanghui. I doubt that outsourcing is in the long range plan of China. </span></p> <p><span style="font-family:verdana,geneva;font-size:small;">Short of actually importing Chinese pork, I don’t know how much impact China’s mere acquisition of Smithfield will have on the Smithfield brand. But it won’t take long to find out. Just Googling around, I see that the issue of food safety related to the Chinese reputation is an obvious concern voiced about the Smithfield acquisition. </span></p> <p><span style="font-family:verdana,geneva;font-size:small;">There are people who say it won’t make any difference because Smithfield will still be operated under the terms of U.S. regulation. In that sense, it may be a totally unwarranted fear. But regulation is not the only thing that shapes a company. Ownership counts too, and people instinctively know that. Brand is a matter of perception and trust, and reputation is about all a consumer has to go by. </span></p>
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