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China, EU cut imports of Brazilian meat as scandal widens

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Beef cuts at the popular Lapa Market in Sao Paulo. Meat-packers 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. Victor Moriyama
by Brad Brooks and Dominique Patton
China and the European Union curtailed meat imports from Brazil this week after police, in an anti-corruption probe criticised by the government as alarmist, accused inspectors in the world's biggest exporter of beef and poultry of taking bribes to allow sales of rotten and salmonella-tainted meats.
As the scandal deepened, Brazil's Agriculture Minister Blairo Maggi said the government had suspended exports from 21 meat processing units.
But he also criticised the investigation by Brazil's Federal Police into meat-packing 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.
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Brazil's Agriculture Minister Blairo Maggi: 'I pray, I hope, I work so [a total export ban] does not happen," he said. Eraldo Peres
With other import curbs expected to follow, the scandal stemming from a police operation codenamed "Weak Flesh" could deal a heavy blow to one of the few sectors of Latin America's largest economy that has thrived during a two-year recession.

Police on Friday named BRF and JBS, along with dozens of smaller rivals, in a two-year probe into how meat-packers 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.
JBS is the world's largest meat producer and BRF the biggest poultry exporter.
The companies have denied any wrongdoing, and authorities have said no cases of death or illness have been linked to the tainted meat investigation.
New allegations of unsavoury business practices in Brazil come as the country is still reeling from a massive graft scandal centred on state-controlled oil company Petrobras that is widening into other sectors.

Brazil's President Michel Temer has sought to downplay the meat-packing probe, saying it involved only 21 of Brazil's more than 4,800 meat processing units.
But 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.
Precautionary measure

China, which accounted for nearly one-third of the Brazilian meat-packing industry's $US13.9 billion in exports last year, suspended imports of all meat products from Brazil as a precautionary measure.

The European Union suspended imports from four Brazilian meat processing facilities, ABPA said, citing the nation's agriculture ministry.
Ricardo Santin, ABPA's vice president of markets, said two of the suspended plants process poultry, one beef and the other horse meat. One of the poultry plants is operated by BRF, said Santin.
In a statement, BRF said the company had not received any formal notice from Brazilian or foreign authorities related to the suspension of its plants.
South Korea's agriculture ministry said in a statement that it would tighten inspections of imported Brazilian chicken meat and temporarily bar sales of chicken products by BRF.

More than 80 per cent of the 107,400 tonnes of chicken that South Korea imported last year came from Brazil, and BRF supplied almost half of that.
BRF could prove more vulnerable to the scandal since a larger share of its operations are physically based in Brazil, while JBS derives most of its sales from abroad, according to a report by Goldman Sachs analysts led by Luca Cipiccia.
The scandal "could be enough to compromise temporarily Brazilian protein's acceptance worldwide", Credit Suisse Securities analyst Victor Saragiotto wrote in a note to clients.
Chile is also temporarily banning imports of all Brazilian meat products, the agriculture ministry said.

The European Commission said the scandal would not affect negotiations between the European Union and South American bloc Mercosur about agreements on free trade.


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