Brazil: corruption among big meat producers (including JBS and BRF). China and the EU suspend imports from Rio

March 17, the Brazilian Federal Police announced the conclusion of the investigation lasted two years on corruption national meat industry. Thirty arrests. Among the companies involved, there would be 21 companies including meat giants, facilities and suppliers. According to what is apparent from the Brazilian press, in the names of prominent industry maxi-investigation also appear such as JBS and BFR. The crime is the existence of a grey area between business and the public authorities that would allow him to evade controls and taxes on exports. Although the operation is called “Meat Fraca” (translated as meat Marcia), local institutions, mainly political, keen to point out that the investigation is on the correctness of the procedures and not on product quality. But there were also cases of meat sold abroad despite being contaminated with salmonella or had not been processed in compliance with legal standards. China and the European Union, respectively the first and second largest importer of Brazilian beef, have suspended purchases and asked for an explanation to the American counterpart, followed by Egypt, Chile and South Korea. Bejing, Cairo and Santiago have, afterwards, lifted the ban. Similarly, the Ministry of Agriculture (which calls “disastrous” the idea of a permanent embargo trading partner) would be to suspend the license for the export of 21 companies involved. The same measure does not apply to the domestic market, where instead of pork, beef and poultry produced by companies is still in regular trade and where the Brazilian Minister Michel Temer (pictured) became immortalised in a churrascaria to reassure consumers. Just the tightness of the internal market, which addressed 80% of the Brazilian production of meat, can represent an element of stability for the market before tanning. It is early to speculate repercussions, but the already low rate of slaughterings looks set to slow down. In the space vacated by Brazil could throw some competitors – Uruguay, Paraguay and Argentina on pole – that are engaging in the internationalisation of its market. For some destinations, such as furniture (which could see a push towards the cow), it will not be easy. The JBS meat group announces the suspension of the processing of beef for three days in 33 of the 36 Brazilian production units. Next week also will resume activities with a gauge of 35% of output capacity.

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