Brazil Meat Scandal Continues to Rock Exports as Demand Takes a Hit

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29 May 2017 --- The Brazilian company at the heart of a recent meat scandal, JBS, has temporarily suspended beef production at 33 out of 36 of its plants. However, production is set to resume this week, the company reports. JBS is the largest meat processor in the world and has been embroiled in a food fraud scandal since March this year causing demand for Brazilian beef to take a battering.

JBS share prices recently declined following reports alleging that Brazilian President Michel Temer was involved in a taped conversation with JBS chairman connected to bribery. Earlier this year a federal investigation was launched in the country following allegations that 21 companies paid bribes to government inspectors to get health certification and official clearance. 
 
Poultry exporter BRF SA, a Brazilian food conglomerate, producing animal proteins, processed foods, margarine, pasta, frozen pizzas and vegetables, is also among the accused. Both companies have denied any wrongdoing.
 
The corruption scandal has led to some countries to ban Brazilian meat exports. However, the meatpacker is preparing to resume production this week and keep its workforce of approximately 125,000 going. 
 
Brazil accounts for around 20% of global beef exports and almost 40% of chicken exports. A whole host of countries initially banned or restricted Brazilian meat imports following the scandal. 
 
China, including Hong Kong, is Brazil’s largest market and has restricted meat imports for a while now. However, there are some reports suggesting that these may be lifted soon. Chile and Egypt are also understood to be lifting restrictions. 

As Operation Weak Flesh continues, the country’s Agricultural Minister Blairo Maggi recently said that the allegations that meat processors paid bribes for inspectors to turn a blind eye to unsanitary or irregular activity, were exaggerated. He claimed the investigation is wrongly challenging the quality of one of the country's most important exports.

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