By Leah Douglas
(Reuters) - Smithfield Foods, the largest pork processor in the world, will close its Vernon, California, plant and reduce its hog herd in the West, the company announced Friday.
The closure, which the company attributed in a statement to "the escalating cost of doing business in California," comes as the state rolls out a new law requiring livestock be given more spacious confinements.
Smithfield, owned by Hong Kong-listed WH Group (OTC:WHGLY) Ltd, did not immediately respond to a Reuters inquiry about whether the law, known as Proposition 12, contributed to the decision to close the plant.
Workers at the plant will be offered financial and transition assistance, including the option to relocate to other Smithfield facilities, the company said.
"A fair agreement that compensates their workers until next year has been reached," said John Grant, the president of the United Food and Commercial Workers 770, which represents workers at the Vernon plant.
The plant, which processes pork for Smithfield's Farmer John brand, had among the largest outbreaks of COVID-19 at any U.S. meat plant according to calculations by the Food and Environment Reporting Network (FERN), which was cited by government agencies and media throughout the pandemic.
Smithfield and a subcontractor were fined more than $100,000 from California's workplace safety regulator in late 2020 for failing to adequately protect workers from the virus.
The pork company stopped slaughtering pigs at its hometown plant in Smithfield, Virginia, in 2021, after a review of its East Coast operations. [L1N2OP2VK]