Last week the Humane Society of the United States filed a complaint with the Securities and Exchange Commission, charging that Smithfield Foods is misleading consumers and shareholders with a video series suggesting it does not abuse pigs.
In the filing, HSUS stated that videos posted on the Smithfield, Va.-based company’s corporate responsibility website, YouTube and other Internet sites “are replete with false and/or misleading representations—both express and implied—about Smithfield’s animal welfare and environmental practices.”
Federal law prohibits companies from making false or misleading statements.
The complaint said thata video series detailing Smithfield’s operations at its Murphy-Brown production subsidiary in North Carolina suggests that humane treatment of animals is the company’s highest priority, and that hogs are raised under ideal conditions. In reality, Smithfield confines breeding sows in gestation stalls, according to the filing.
The animal-rights group also attacked a key Smithfield customer for buying its pork.
“McDonald’s has publicly recognized that these crates are not good for animals, but it still buys pork from pigs bred using this cruel system,” Paul Shapiro, HSUS senior director of farm animal protection, told the Associated Press. “It’s time for McDonald’s to get gestation crates out of its supply chain.”
McDonald’s responded with a statement saying that, “McDonald’s has been a long-time supporter of alternatives to gestation stalls, and we will continue to support the efforts of Smithfield Foods and all of our suppliers to phase them out.”
Smithfield is still in the process of converting its production protocol from individual stalls to group housing for sows, but admitted that transition will take years to be completed. The company issued a written statement noting that, “We are proud of our unparalleled track record as a sustainable food producer and stand confidently behind our public statements concerning animal care and environmental stewardship.”
More pointedly, Smithfield has made no secret that its initial capital investment in phasing our gestation stalls hit a snag in the last three years.
“We announced the [gestation stall] phase-out plan in January 2007, with a goal of completion within 10 years,” Dennis H. Treacy, executive vice president for Corporate Affairs, stated in an online chat about animal welfare issues. “Not long after, the economy took a nosedive. That forced us to delay our conversion work. However, in September 2010, we announced that capital expenditures for the phase-out had restarted. We now expect to have 30% of all company-owned sow housing converted to group stalls by December 2011.”
A media swing and a miss
That statement revolves around different question than the one posed by the HSUS filing: Is the pace of change too slow? Should any business be required to adapt its operations according to its critics’ schedule?
The marketplace typically resolves that dilemma. The companies that can anticipate and outpace changing tides earn greater market share; the ones who can’t, don’t.
What’s troubling about this latest, increasingly repetitious attack on the use of gestation stalls isn’t the fact that industry cannot wave a wand and magically replace all its infrastructure overnight, it’s the gullibility with which the media simply swallow the content of HSUS’s complaint with little more than a routine reproduction of canned responses from the principals involved.
That’s about as lazy as journalism gets.
For one, gestation stalls have been in the activist community’s crosshairs for more than a decade. Half a dozen state initiatives have been passed that ban their use—none in a state with a significant pork industry presence, but it’s not like the issue has been flying under the radar.
More importantly, the SEC regulations prohibiting “false and misleading statements” made to investors clearly contain a caveat that goes unmentioned here: Those statements need to be made deliberately and with knowledge that they would influence earnings. In other words, the corporate officials who are to be held liable must be shown to have had a financial incentive in disseminating those false statements.
That’s not an issue here. The argument that HSUS is making is that the very existence of gestation stalls represents an inhumane practice. It’s the same one they’ve rolled out in every state campaign the group has funded to get consumers to vote down the use of the stalls.
For this complaint to be taken seriously, HSUS would have to produce evidence that Smithfield executives knew that their statements regarding animal care practices were false and that they stood to profit from them.
That simply can’t be—and won’t be—done, and for media outlets to publicize the HSUS news release without putting both the background and the legalities of this phony filing into perspective is reprehensible.
Dan Murphy is a veteran food-industry journalist and commentator