Quotes of the Day
Don’t eat the meat.
Brazilian authorities tried to contain the fallout from a police sting that has raised questions about the safety of the nation’s meat industry, as governments around the world moved to suspend imports due to sanitary concerns.
China, the biggest buyer of Brazilian meat, along with South Korea, the European Union, Egypt and Chile took steps to temporarily ban imports from either Brazil or specific companies accused by Brazilian federal police Friday of bribing sanitary officials for health certificates, while the U.S. and other countries said they would increase inspections. Among the dozens of companies targeted are some of the world’s biggest producers and exporters of chicken and beef, including JBS SA and BRF SA.
Both companies have denied selling bad meat or bribing officials.
Brazil’s leaders fear that police allegations that meatpackers peddled rotten, salmonella-infested products could tarnish one of the country’s most vibrant industries just as the economy is fighting to recover from its deepest recession on record. Brazil is the world’s second-largest producer of chicken and beef, trailing only the U.S., and meat products are among its top exports.
The European Union asked Brazil to stop companies implicated in the fraud from exporting to the region, according to Enrico Brivio, a spokesman at the European Commission. The bloc has suspended imports from four Brazil plants including one owned by BRF, Ricardo Santin, a director at the Brazilian Association of Animal Proteins, or ABPA, told journalists in Sao Paulo.
“We have asked our member states to be vigilant,” Brivio told reporters in Brussels. “The commission remains in constant contact with the Brazilian authorities and is following this matter very closely.”
South Korea has suspended the distribution of Brazil chicken products. The government will closely examine the meat, and if it’s concluded that there are no hygienic problems, they would allow distribution, Sewon Kim, who’s responsible for the Economic Affairs department at Asian nation’s embassy in Brazil, said in an emailed response to questions from Bloomberg.
The scandal may impede Brazil’s plans to open new markets including Mexico and South Korea for beef after the U.S. allowed imports of fresh meat last year, Antonio Carmadelli, the head of the Brazil meat exporters association Abiec, said to journalists in Sao Paulo.
But after Chile announced a “temporary” ban on Brazilian meat products, Maggi angrily threatened reprisals.
“We are major importers of Chilean products: fish, fruit and other products, and Brazilians demand that we should erect barriers. Trade is like that,” Maggi said.
At least 30 people have been arrested in the scandal, with Brazilian police raiding more than a dozen processing plants.
Market analysis group Capital Economics warned the “developing scandal over Brazil’s meat exports could plausibly derail the country’s economic recovery.”
“Brazil is facing a potential loss of export revenues of about US$3.5 billion. That’s the equivalent of about 0.2 per cent of GDP,” Capital Economics said.
The investigation by Brazil’s Federal Police, an agency similar to the F.B.I., deals yet another blow to the country’s business establishment, which is struggling to recover from colossal graft scandals around Petrobras, the national oil company, and Odebrecht, a huge construction company.
In the newest corporate scandal, investigators said that employees at two food-processing giants, JBS and BRF, paid federal inspectors to ignore the adulteration or expiration of processed foods. Inspectors also falsified sanitary permits, and bribes were channeled to the Brazilian Democratic Movement Party of President Michel Temer, according to the authorities.
Rafael Cortez, a political scientist at Tendências, a consultancy in São Paulo, called the meatpacking inquiry “one more element that will add to the picture of political instability.” Brazil’s political establishment was already reeling from an array of other graft cases.
The meatpacking investigation also casts doubt on Brazil’s agribusiness industry, a relatively resilient pillar of the nation’s weak economy. JBS is one of the world’s largest meat producers, with the United States chicken processor Pilgrim’s Pride among its foreign subsidiaries. BRF is a major exporter of meat to the Middle East and Asia.