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Humane Society CEO Drops Icahn-Backed Bid for Tyson Board

Humane Society of the U.S. Chief Executive Officer Wayne Pacelle, who is trying to pressure Tyson Foods Inc. (TSN) to phase out gestation crates for sows, dropped a plan to seek a seat on the company’s board.

Tyson, the second-largest U.S. pork processor, has a dual- class share structure that would allow the Springdale, Arkansas- based company to reject his bid, Pacelle said.

Pacelle filed to join the Tyson board in October to urge the company to phase out crates that constrain the movement of female pigs. Billionaire activist investor Carl Icahn said that month he agreed to serve as an adviser in Pacelle’s effort.

“What we’re picking up from Tyson is they are not receptive to this path,” Pacelle said yesterday in a telephone interview. “The end goal is not for me to be on the board. The end goal is for the company to adopt common-sense animal welfare policies.”

Tyson, which also processes chicken and beef and is the largest meat processor in the U.S., announced in October the start of a program to audit the treatment of animals at the farms that supply the company, Worth Sparkman, a spokesman, said in an e-mail.

“While we support the right of farmers to choose the best method for raising their hogs, we also support our customers’ right to choose the best product specifications for their consumers and businesses,” Sparkman said.

Availability ‘Limited’

“The availability of pork from hogs born to group-penned sows is currently very limited,” he said. “However, we will monitor this supply and, if there’s a sufficient increase over time, we’ll explore the possibility of using it to meet the needs of those customers who want pork from hogs raised this way.”

Tyson is “out of step” with U.S. consumers, Pacelle said. The animal-protection charity will use public-awareness efforts, litigation, investigations and corporate campaigns to pressure Tyson, he said.

This year, about 50 major food retailers have agreed to phase out purchases of pork from suppliers that rely on gestation crates, Pacelle said. McDonald’s Corp. (MCD), the world’s largest restaurant chain, and Kroger Co. (KR), the biggest U.S. grocery store chain, have urged suppliers to shift away from them as well.

‘Very Important’

A decision five years ago by Smithfield Foods Inc. (SFD), the world’s largest hog producer and pork processor, to move toward group housing “is becoming very important to our customers and is an important factor in the recent growth in our food-service business,” Chief Executive Officer C. Larry Pope said on a Dec. 6 conference call.

Pork accounted for 16 percent of Tyson’s sales in the fiscal year through September 2012 and a third of operating income, according to data compiled by Bloomberg.

Tyson buys hogs from thousands of independent farms, some of which use gestation stalls for mother pigs, Sparkman said. Tyson’s Pork Group Inc. unit raises hogs and feeder and weaned pigs for sale to processors and represents less than 3 percent of the company’s total pork production, according to the company’s website.

To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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