By Paul Kiernan
RIO DE JANEIRO -- Brazilian authorities scrambled to contain the
fallout from a police sting that has raised questions about the
safety of the nation's meat industry, as more countries said they
planned 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 ban
imports from either Brazil or those companies accused by Brazilian
federal police Friday of bribing sanitary officials for health
certificates. 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.
Brazilian officials fear police allegations that meatpackers
peddled rotten, salmonella-infested products could hurt one of the
country's most vibrant industries at a time when 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.
Both here and abroad, consumers expressed concern about the
allegations. "We've been cheated if all of this is true," said
Patricio Buccioni, a 68-year-old taxi driver in Santiago who often
buys Brazilian beef at the supermarket. Asked whether he will
continue doing so in the future, Mr. Buccioni said, "I'm going to
be more careful."
GPA, Brazil's largest retail group, said in a note that it is
watching the scandal closely and "repudiates any practice that puts
at risk the health of its customers." The firm added that its
supermarkets conduct internal monitoring to guarantee the quality
of their meats.
The investigation, dubbed "Weak Flesh," took Brazil's leaders by
surprise and left them walking a fine line as they sought to calm
consumers and trade partners without appearing dismissive of the
findings.
"Agribusiness for us in Brazil is an extremely important thing,
and it must not be devalued by a small nucleus," President Michel
Temer said Monday in a speech at the American Chamber of Commerce
in São Paulo.
Mr. Temer has been huddling with regulators, meat producers and
foreign officials to discuss the probe and reassure them that
Brazilian meat is safe. After a day of back-to-back meetings
Sunday, the president treated 19 ambassadors and eight foreign
trade officials to dinner at Steak Bull, a plush, all-you-can-eat
grill near the presidential palace.
Mr. Temer's office said Sunday night that all the meat served at
the dinner was of Brazilian origin, after local media outlets
reported that the restaurant specializes in imported cuts.
In a Twitter video featuring uplifting music and scenes of green
pastures, Mr. Temer said Brazil's meat producers have "won over
consumers and obtained approval from the most demanding markets in
terms of enforcement." Agriculture Minister Blairo Maggi, himself
the owner of huge tracts of farmland in Brazil's interior, said
that "the vast majority" of government workers are trustworthy and
that only 21 of the country's 4,837 meat plants are under
investigation.
Talking to reporters on Sunday, Mr. Maggi said the government
supported the investigation but he criticized the federal police
for not clarifying some information with the ministry. For
instance, police highlighted the use of meat from pigs' heads in
sausages, a practice Mr. Maggi said is in fact legal in Brazil.
And some meat-loving Brazilians shrugged off the concerns.
"Yesterday, I had a barbecue with my family and friends," said
José Molina, a 57-year-old advertising worker, while preparing for
a meat-heavy lunch at a São Paulo steakhouse. "I think there's
exaggeration and that the situation will go back to normal
soon."
But several governments around the world expressed worry about
the allegations, and industry officials were bracing for further
restrictions from export markets.
China informed the Brazilian Agriculture Ministry on Monday that
it will ban meat imports from the South American country until
Brazil's government explains the situation. Mr. Maggi was scheduled
to hold a videoconference with Chinese authorities on Monday night
to "provide clarification," the Brazilian ministry said.
China imported nearly $2 billion of meat products from Brazil
last year.
Enrico Brivio, spokesman for public health and food safety at
the European Commission, said Monday during a news briefing that
the bloc is moving to suspend imports from "any of the
establishments implicated in the fraud."
"We've asked our member states to remain vigilant and
increase...controls on meats coming from Brazil," Mr. Brivio said,
referring to "documentary and physical checks."
The Agriculture Ministry of Chile, one of Brazil's top-10 export
markets, said on Twitter that it had suspended imports of Brazilian
beef until it received further details.
South Korea's Ministry of Food and Drug Safety said it wouldn't
allow chicken already imported by BRF to be sold or circulate in
the country. And in Finland, the food safety authority said it had
launched its own investigation.
Egypt temporarily suspended imports of poultry and other meat
from Brazil pending a response from the Brazilian Embassy in Cairo
to questions sent by the local authorities, Agriculture Ministry
spokesperson Hamed Abduldayem said.
BRF said Monday that it hasn't been officially notified by
foreign or domestic authorities of any suspension by countries
where it does business.
Industry officials sought to play down the scandal by calling
the police's conclusions into question. Antonio Jorge Camardelli,
head of beef exporters' group ABIEC, said in a news conference
Monday the police based some of their allegations on technical
mistakes, saying an "unnecessary crisis" had resulted.
The biggest questions going forward are how many more countries
will move to restrict Brazil's meat exports, and for how long.
Neil Shearing, chief emerging markets economist at Capital
Economics, said that while it is too soon to know the full impact,
the scandal could "plausibly derail the country's economic
recovery" if it continues to grow.
"It goes without saying that this is the last thing that
Brazil's economy needed," Mr. Shearing said.
--Emre Peker, Paulo Trevisani,
Jeffrey T. Lewis
, Luciana Magalhães,
Samantha Pearson
, Lucy Craymer and Ryan Dube contributed to this article.
Write to Paul Kiernan at paul.kiernan@wsj.com
(END) Dow Jones Newswires
March 20, 2017 16:32 ET (20:32 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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