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March 24, 2017

JBS suspends production at majority of Brazil plants

JBS, the Brazilian meat giant and one of the companies embroiled in the Carne Fraca allegations, halted output at 33 of its 36 domestic plants this week, it has revealed.

By Dean Best

JBS, the Brazilian meat giant and one of the companies embroiled in the Carne Fraca allegations, halted output at 33 of its 36 domestic plants this week, it has revealed.

The owner of the Seara brand, which has been named as one of the meatpackers in a Brazilian police probe into alleged bribery and unsanitary practices, made the announcement in a filing yesterday after the country’s stock market asked the company to clarify a newspaper report that said the group had reduced its slaughtering by 25-30%.

“The company, through this clarification, informs its shareholders and the market in general that it suspended, for three days, the production of beef in 33 units of the 36 that the company maintains in Brazil,” JBS said. “For next week, the company will operate in all its units with a reduction of 35% of its productive capacity. These measures are aimed at adjusting production until there is a clarification of the embargoes imposed by Brazilian beef importing countries.”

Markets including Canada, China, the EU and Japan have this week placed bans or restrictions on meat imports from Brazil in the wake of the allegations, which were announced last Friday.

Police accuse executives from large meat processing companies of paying politicians and inspectors from Brazil’s Ministry of Agriculture to overlook unsanitary practices, allowing them to manufacture adulterated products. Police claim ministry officials in the states of Paraná, Minas Gerais and Goiás acted to protect the companies.

Brazil’s federal revenue agency allege the corrupt inspections resulted in adulterated products being allowed to be sold for human consumption circulating freely in the domestic market, serve as school snacks or being exported.

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Last Friday, after the investigation was announced, JBS issued a statement to say police had conducted raids at several Brazilian companies, which involved three of its own facilities – two in Paraná and one in Goiás.

The company said no judicial measures have been taken against the company’s executives and underlined its headquarters were not a target of the operation.

However, JBS admitted “a judicial measure” was issued at one of its facilities in Paraná against one of its veterinarians, who performs auxiliary inspections services for the Ministry of Agriculture.

“The company strongly repudiates any practices related to product adulteration or tampering, whether in the production or sale of products, and it is available to address any concerns with the authorities,” JBS said.

The Brazilian government has attempted to emphasise the probe is focusing only specific incidents and it has sought to talk up the quality of the country’s meat industry.

Blairo Maggi, Brazil’s agriculture minister, has met with diplomats to try to assure the country’s international customers of production and quality control.

Maggi has backed the probe but questioned the way it was announced. “I am in favour of the investigation and transparency, but I disagree with the way it was disclosed. I’m worried about the consumer and the market. On Wednesday, I left the Ministry of Agriculture, Livestock and Supply to make a surprise visit to a supermarket in Brasilia. I went … to talk to some consumers like this lady who is afraid to eat meat. I told her and the others they can trust it because our meat is of quality,” he said.

However, Maggi has reportedly warned the country could see its share of meat exports fall by 10%, predicting it could take the industry five years to recoup sales.

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