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Consumer News Release

For immediate release -- Tuesday, January 25, 2000.
Contact Bob Brammer - 515-281-6699

Judge Blocks Smithfield Foods Acquisition of Iowa Assets of Murphy Farms

Judge grants Attorney General's request for temporary injunction. Miller sued to block Smithfield acquisition of Murphy Farms, alleging it would violate Iowa law that prohibits packers from controlling livestock in Iowa.

A Humboldt County District Court Judge issued a temporary injunction late Monday barring Smithfield Foods Inc. from acquiring the Iowa assets of Murphy Farms Inc.

The injunction was sought by Iowa Attorney General Tom Miller. Miler filed a lawsuit Monday alleging that Smithfield's acquisition of Murphy Farms assets in Iowa would violate Iowa's Corporate Farming Act, which prohibits meat processors from owning, controlling or operating feedlots in Iowa.

District Court Judge Ronald H. Schechtman issued a temporary injunction late Monday that will be in effect until the court rules on the Attorney General's motion for a preliminary injunction. A preliminary injunction would be in effect until the lawsuit is decided at trial. A hearing on the preliminary injunction was set for Feb. 10 in Humboldt County District Court in Dakota City.

"Packers may not control hog production facilities in Iowa," Miller said. "Our suit alleges that if Smithfield acquires Murphy Farms assets in Iowa, Smithfield will retain essential control of pork production at almost 300 sites in Iowa where Iowa producers have swine production contracts with Murphy Farms. We allege that would violate Iowa law."

Smithfield says it is both the world's largest pork processor and hog producer. The suit said Smithfield reported sales of $3.8 billion last year. On Sept. 2, 1999, Smithfield Foods, of Smithfield, VA, announced that it had reached agreement in principle to acquire Murphy Farms, Inc., which is headquartered in Rose Hill, NC. The acquisition had been scheduled to be completed as early as today.