Export Bans and Scandal Slam Brazil’s Meat Industry

Police named BRF and JBS, along with a number of smaller rivals, in a two-year probe into how meatpackers allegedly paid off inspectors to overlook practices including processing rotten meat, shipping exports with traces of salmonella and simply not carrying out inspections of plants. The companies have denied any wrongdoing, and authorities have said no cases of death or illness have been linked to the tainted meat investigation.

Brazil’s Agriculture Minister Blairo Maggi said the government had suspended exports from 21 meat processing units. But he also criticized the investigation by Brazil’s Federal Police into meatpacking companies, calling their findings “alarmist” and saying they used a few isolated incidents to tarnish an entire industry that maintains rigorous standards.

An all-out ban on Brazilian meat exports would be a “disaster,” Maggi added. “I pray, I hope, I work so that does not happen,” he said, speaking to reporters outside his office in Brasilia. “We expect more than 30 countries to question Brazil about this issue.”

“This is a scandal that will not go away soon as a number of arrest warrants have been issued in relation to the probe”

Brazil is the world’s biggest beef and poultry exporting nation to more than 150 countries. This news comes at a bad time as the country is struggling to overcome its worst recession in history.

Market analysis group Capital Economics warned the scandal over Brazil’s meat exports could derail the country’s economic recovery.

“Brazil is facing a potential loss of export revenues of about $3.5 billion. That’s the equivalent of about 0.2 percent of GDP,” Capital Economics said. “The economic impact will depend to a large extent on how long any bans stay in place. There are some reasons for optimism here.”

Sales in 2016 reached $5.9 billion in poultry and $4.3 billion in beef, according to Brazilian government data. Total meat exports amount to about seven percent of exports and 0.7% of gross domestic product, according to Capital Economics.

Brazil’s President Michel Temer has sought to downplay the meatpacking probe, saying it involved only a small number of Brazil’s more than 4,800 meat processing plants. Francisco Turra, head of Brazilian beef producers association ABPA, told reporters it had put the entire meat industry in jeopardy and “destroyed” a hard-won image of quality products.

This is a scandal that will not go away soon as a number of arrest warrants have been issued in relation to the probe, naming several company executives from JBS and BRF. Both companies have vehemently denied any wrongdoing in this matter.

Source: Meatbusiness