By Luciana Magalhães and Paulo Trevisani 

LAPA, Brazil -- The government raced to protect a key industry, saying meatpackers accused of paying bribes to meat inspectors in a corruption scandal did so to get their products out faster, not to sell rancid meat here and abroad.

Exports fell to $74,000 on Tuesday, the latest data available, from $60.5 million the day before as at least 17 import markets took action against Brazilian meat exports. China, for instance, suspended all meat shipments from Brazil, while the U.S. will now inspect all Brazilian protein and not only a sample, Brazil's Agriculture Ministry said.

Bribes to sanitary inspectors and other violations happened in 21 plants from several companies, federal police have alleged, adding that corrupt officials issued false sanitation documents or permitted the sale of rotten meat, some of which may have gone to Brazil's lucrative foreign markets.

But in an attempt to limit the damage rippling through the industry, officials in President Michel Temer's government are now sharply criticizing the police handling of the case and saying the corrupt company employees who made payoffs did so to expedite permits. They claim the companies that have been accused of wrongdoing didn't sell tainted meat.

"The police have found nothing against the quality of Brazilian meat," Luis Rangel, the Agriculture Ministry's head of sanitation quality, said in an interview on Wednesday. "What police thought was a problem is actually legal and safe."

Still, the ministry suspended shipments to overseas from all six exporting plants among the 21 investigated, "as a sign of respect to our clients," Mr. Rangel said.

He said he has sent letters to China, Chile and other countries that had temporarily suspended Brazilian beef, addressing their concerns about the safety of animal proteins this country exports. The government also sent documentation to the World Trade Organization asserting that quality-control systems in Brazil's meatpacking plants were sound.

The federal police, which staged a two-year investigation of the meatpacking industry and targeted more than 100 people, stood by the account first made public last Friday. Thirty-eight arrest warrants were issued, and 77 people were brought in for questioning, among them inspectors and employees of the meatpacking firms. The Ministry of Agriculture said it had suspended 33 workers.

But even inside the ranks of the police, there were discrepancies over how the information about the arrests of meat inspectors and some company officials were handled, with some officers disputing information that had been put out that cardboard had been used as filler in some processed-meat products.

Police officials, who on Friday said the meat companies under investigation "didn't care about the quality of the meat or food" they sold, declined this week to give interviews and said the case is under seal.

But in a joint statement with the Ministry of Agriculture issued late Tuesday, the police said "the facts refer to wrongdoing directly related to some [civil] servants and don't mean the entire sanitary inspection system is compromised."

The judge who oversaw the investigation, Marcos Josegrei da Silva, said in an interview that only a small portion of the country's more-than-4,800 meat processors was targeted.

"We can't say that all the meat isn't proper for exports or for the domestic market," the judge said, adding that the investigation is still open, and, so far, has been limited to a small part of the country. "This is not what the investigation shows."

Brazil welcomed the news that South Korea was reverting its initial suspension of meat imports, and Mr. Rangel said Chile is moving toward ending its suspension, too, raising hopes exports could resume soon. Other markets such as the European Union have limited their suspension to only a few Brazilian plants, not all animal proteins coming from Brazil, and no country has issued an outright ban.

The fallout from the investigation has put meat producers on the defensive, particularly JBS, Brazil's largest. The São Paulo-based firm, which exports beef world-wide and owns protein producers in the U.S., is planning an initial public offering for its international operations.

"We adopt strict standards to ensure the safety and quality of our products," the firm said. "We have complete confidence in our approach to food safety and product quality in Brazil, and in all of our operations around the world."

In a bid to demonstrate what they called the safety of Brazilian beef, poultry and pork, Agriculture Minister Blairo Maggi arrived in Lapa in the far south, 34 journalists in tow, to visit a JBS plant that sold 61,000 tons of poultry to China last year and is one of the 21 suspected of corruption. On Tuesday, the plant was slaughtering, deboning and packing chicken.

Work was disturbed several times as Mr. Maggi, himself a major landowner known for his production of soybeans, stopped along the production line to talk up Brazil's meat-producing prowess and criticize the version the police gave out on Friday.

"I regret that those who carried out the investigation weren't careful enough," he said to reporters who, like him, wore white aprons, boots and head covers to avoid contamination. "It was communicated in a way that created panic."

Write to Paulo Trevisani at paulo.trevisani@wsj.com

(END) Dow Jones Newswires

March 22, 2017 19:11 ET (23:11 GMT)

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