Brazil's tainted-meat probe triggers bans from China to Chile

Countries curtailing Brazilian beef imports due to the tainted food scandal there may have few sources to turn to for securing red meat.
Workers unload packed meat from a truck in Sao Paulo, June 3, 2015.
Workers unload packed meat from a truck in Sao Paulo, June 3, 2015.PHOTO: REUTERS

SAO PAULO (BLOOMBERG, REUTERS) - Some of the world's biggest protein buyers are slapping limits on supplies from Brazil as producers in the country become embroiled in a tainted-meat scandal.

China, the largest importer of Brazil chicken and beef, has temporarily suspended shipments from the South American country. Hong Kong has also banned all meat imports from Brazil while the European Union, Chile and Japan have restricted purchases.

Singapore authorities said they're monitoring meat shipments from Brazil, as South Korea lifted its short-lived ban on chicken imports from BRF SA after confirming that it never purchased rotten chicken from Brazil.

The move to protect meat supplies comes after Brazilian federal authorities said last week they're investigating evidence that companies including BRF and JBS SA, the nations' largest meat producers, bribed government officials to approve the sale of spoiled meat.

Prosecutors allege some sausages and cold cuts contained animal parts such as pig heads, that some meat products were adulterated with cardboard, and that in some cases, acid was used to mask the smell of tainted meat.

Global importers were quick to take action in wake of the scandal. 

China and Hong Kong were the destination for about a third of the US$5.5 billion (S$7.7 billion) of beef shipped from Brazil last year, according to the meat exporters group Abiec. They accounted for 17 per cent of the chicken shipped by the South American nation, according to industry data.

China has said it won't accept meat shipments until Brazil provides further clarification on the probe. Officials have blocked some shipments of beef and chicken from clearing customs at ports, said a person with knowledge of the situation, who asked not to be identified because the information isn't public.

Chile also temporarily banned all meat imports from Brazil, while Japan suspended imports from 21 food-processing facilities. In Britain, one of the top buyers of Brazilian meat in the European Union, regulators stepped up border checks and hygiene inspections on meat from Brazil.

Yum China Holdings Inc, which operates the biggest fast-food chain of more than 7,500 restaurants in China, declined to comment on whether it's affected by the scandal. McDonald's Corp, which runs 2,400 outlets in the mainland, said it doesn't import meat from the suppliers named in the probe. The company uses mostly domestic and Australian meat at its restaurants in China, according to a spokeswoman.

China edged past Brazil last year as the second-largest consumer of beef and veal, with both nations accounting for about 13 per cent of global demand.

South Korean retailers Lotte Shopping Co.'s Lotte Mart, E-Mart Inc and Homeplus Co said they are suspending sales of Brazilian chicken at their stores out of caution, even as the country lifted a temporary suspension on chicken imports from BRF. The lift came after government officials confirmed with Brazil that imports from BRF are from plants that aren't contaminated, according to the Ministry of Agriculture, Food and Rural Affairs.

BRF is the only supplier among the 21 plants named in the probe that ships to the Asian nation, according to the ministry. South Korea said it has never purchased rotten chicken and will maintain strengthened inspections on imports from Brazil, which supplied about 89,000 tons of chicken - or about 83 per cent of South Korean's imported poultry.

Brazilian authorities confirmed that companies implicated in the probe have been suspended from exporting to the European Union, European Commission spokesman Enrico Brivio said. The bloc has suspended imports from four Brazil plants including one owned by BRF, Ricardo Santin, a director at the Brazilian Association of Animal Proteins told reporters in Sao Paulo.

The European Union is the second-biggest destination for the beef and the third for the chicken, accounting for less than 10 per cent of total shipments.

"We have asked our member states to be vigilant," Brivio told reporters in Brussels. "The commission remains in constant contact with the Brazilian authorities and is following this matter very closely."

JBS and BRF have taken out full-page newspaper ads and paid for prime-time television spots to reassure consumers their meat is safe to eat after finding themselves at the center of Brazil's latest corruption probe.

The scandal may impede Brazil's plans to open new markets including Mexico and South Korea for beef after the US allowed imports of fresh meat last year, Antonio Carmadelli, the head of the Brazil meat exporters association Abiec, said to journalists in Sao Paulo.

The US Meat Export Federation said it's too early to speculate on the potential impact on the global meat trade because "there really are not enough facts available about the investigation, or about how Brazil's trading partners will respond," the group said in an emailed response to questions from Bloomberg.