With an astonishing chutzpah, Smithfield Foods, Inc., the largest producer of pork in the world, launched a campaign recently, basically boasting to its investors in a series of videos and press reports about its animal handling and environmental sustainability practices.
This is the same company that abandoned promises to end use of gestation crates for pregnant pigs and which owns the Murphy Brown LLC facility where the Humane Society of the United States in an undercover investigation revealed pigs held in "disturbing conditions", their treatment far below what reasonable people would consider "humane".
This according to a complaint HSUS has filed with the Securities & Exchange Commission, claiming Smithfield’s campaign violates Rule 10b-5 of the Securities Exchange Act of 1934 which prohibits fraudulent or deceptive acts and material false or mis-leading representations in connection with the purchase or sale of securities.
The Complaint states, "The videos are presented as a demonstration of how the company puts its -commitment to product quality, food safety and animal care in practice. Clearly, then, this series is framed as one that addresses matters of interest that have been raised with Smithfield and this is the company‘s direct attempt to respond to them.
"And even further weight is added to the assurances made to consumers by a scene early in the introductory video in which a company veterinarian relates a conversation she had with her son when he asked her about the pigs. The doctor-mother states that she tells her son that while the pigs are eventually going to die, the company‘s responsibility is to provide the -best possible environment, best care that we can make available to them. Certainly, relating its claims in this way paints the level of trust for the stakeholder as one of a degree equal to that shared by mother and son. It would be difficult to imagine an argument that a mother‘s explanation to her son of her moral responsibility to animals in her care can be viewed as anything other than of material importance (and it is surely reasonable to conclude that investors would view such information as trustworthy and accurate)."
The Complaint also points out, "Throughout the video series, assertions are made that create the impression that Murphy-Brown pigs are given a level of care not just higher than industry standards, but the highest level possible and one that is -ideal‖ for pigs. Among the representations that contribute to this are the following:
a) Smithfield‘s responsibility is to provide the -best possible environment, best care that we can make available to them. …
b) Here at Murphy-Brown, we have no higher priority than ensuring the well-being of our animals. Everything we do is about animal care and overall health.
c) Every need is met. If they‘re sick, we take care of them. If they‘re hurt, we take care of them.
d) Regarding fulfillment of the needs of the animals: …for the pigs, it‘s an ideal situation.
e) Smithfield‘s animal welfare program -could serve as a conscientious model for the entire American pork industry.
"Taken together, the message conveyed by these statements and others asserted throughout the videos is that Smithfield‘s animal care standards are as high as the company can possibly make them and that they certainly exceed common industry practices by setting the model for the rest of industry to follow. In fact, though, Smithfield cannot substantiate such claims because they are simply not true."
Indeed, "at the end of 2010, an HSUS investigator worked inside a Smithfield/Murphy-Brown breeding facility in Waverly, Virginia that housed more than 1,000 sows in gestation crates, which are metal cages that individually confine sows and are so restrictive they prevent pigs from even turning around. The investigator documented the following findings:
a) Breeding sows were confined inside gestation crates so small the animals could barely move for virtually their entire lives. Frustrated by this extreme confinement, some sows had bitten their bars so incessantly that blood from their mouths coated the fronts of their crates.
b) Sows suffered from open pressure sores and other ulcers and wounds that developed from their confinement and inability to change positions in the crate. Abscesses sometimes formed from simple scratches due to ever-present bacteria. The investigator never saw a veterinarian at the operation. A barn manager told the investigator to ignore a sow with a basketball-sized abscess on her neck, and then cut the abscess open with an unsterilized razor.
c) Employees jabbed a lame sow‘s neck and back with gate rods to force her to move.
d) Three times, the investigator informed employees that a pig was thrown into a dumpster alive. The animal had been shot in the forehead with a captive bolt gun, which is designed to render an animal unconscious, and was thrown in the dumpster still alive and breathing.
e) Employees mishandled piglets and tossed them into carts.
f) Piglets born prematurely in gestation crates fell through the slats and died in manure pits."
The report of the HSUS investigation was released and 3 months later, Smithfield launched the video campaign.
Aside from the brutal cruelty of such treatment of pigs, the complaint points out the intensive confinement in gestation crates alone is not humane, let alone the best possible care.
According to the Complaint, "[i]n January 2007, Smithfield did, in fact, pledge to phase out its use of gestation crates in company-owned facilities by 2017, but in 2009 the company backtracked on its self-imposed phase out timeframe." There is currently no phase out timeframe.
"While Smithfield is perfectly within its rights not to … reinstitut[e] a gestation crate elimination deadline, it is simply dishonest and unlawful to simultaneously tell investors that animal well-being is the company’s highest priority or that the pigs are provided the best possible care standards and live in ideal conditions."
The Complaint also points out a number of other allegedly misleading statements and images provided to investors about Smithfield’s industry and environmental certifications, use of surgical procedures performed on the pigs, conditions of its facilities, use of manure lagoons, use of antibiotics, and relationship to "organic" farming.
For more on the anti-confinement laws passed in some states and pending bills…