Brazil scandal to hit global meat trade

The scandal around adulterated meat, shady practices, and endemic corruption in Brazil has sent shockwaves around the world and will have a substantial impact on the global meat trade.

Brazil is a major global player in meat exports and surpassed the USA as world No 1 beef exporter in 2016. Yet US beef output, at over 11m tons, is still higher than Brazil’s 9m tons (carcase weight equivalent) but Brazil exported c.20% of its beef or 1.850m tons in 2016. On a product weight basis (allowing for boning out etc) the exports were about 1.2m tons of beef.

In 2016, the key markets for Brazilian beef in 2016 were: Hong Kong (15%); China (14%); Egypt (14%); Russia (11%); EU (9%); and Iran (8%), according to the USDA. According to the Brazilian Beef Exporters’ Association, quoted on GlobalMeatNews.com, the value of Brazilian exports for the first two months of 2017 was worth $846m (€782m). Interestingly, their figures suggest EU demand for Brazilian beef was becoming more significant. Their figures put the EU as the third most-important market for Brazilian beef in value terms for the months of January and February 2017, while Hong Kong and China combined accounted for some $320m of imports in the same period.

Brazil has been also made inroads into the global poultry trade.

Along with Thailand, they’re big suppliers of chicken into Europe. Globally, the scale of Brazilian output is seen in its 4.1m tons of poultry exports in 2016 out of a total output of 13m tons, or 40% of global poultry exports. The main market for Brazilian poultry exports is Saudi Arabia.

So clearly, the scandal which has resulted in investigations into 21 meat plants in Brazil and which has implicated big meat processors such as JBS and BRF, will have a huge impact on the meat trade this year.

The investigations centre on allegations that rotten meat has been exported, that unlicensed additives such as acids were used (to disguise poor quality meat or to bulk up weights) and that Brazilian officials were bribed to ignore the shortcomings.

The reaction from importing countries has varied from full, temporary bans by China, Hong Kong, Japan, Switzerland, and Canada.

Europe has suspended imports from four plants which had licenses to export to the EU and which are on the list of 21 under investigation. ICSA is lobbying for a full ban and believes the EU response to date has been too soft. ICSA travelled to Brussels last week to attend the EU parliament agriculture committee which questioned EU trade and Food Safety officials on the response to the scandal.

ICSA president Patrick Kent called for a full ban on Brazilian meat at a Farm Europe conference in the European parliament, chaired by Mairéad McGuinness MEP, and this call was supported by other EU farm organisations and by MEPs at this and other Brussels meetings attended by ICSA.

ICSA also met Health and Food Safety Commissioner Vytenis Andriukaitis in the margins of a Committee of the Regions meeting, where the ICSA pushed for a tougher response to the Brazilians. The commissioner told ICSA he was travelling to Brazil this week. ICSA was very concerned to hear that DG Sanco (European Commission) officials first found out about the investigations from the Wall Street Journal.

The ICSA is unhappy that trade talks with the Mercosur countries continued last week in Argentina, even in the face of a complete collapse in trust with South American standards. It seems particularly outrageous given that the Brazilians kept this investigation quiet and that the EU found out about it in the press.

All of this revives old wounds. The ICSA, along with the ICMSA and farm groups in the UK under the Fairness for Farmers in Europe umbrella, made official complaints to the EU more than 10 years ago about shortcomings in Brazilian beef traceability, production standards and regulatory oversight, all of which were identified in the EU’s own Food and Veterinary Office reports. The EU seemed to drag its heels on these reports but eventually took action.

So what we have now, is an all-too familiar pattern, where immense resources and effort is put into policing European farmers, to the extent that most farmers here live in dread of inspections and penalties.

Meanwhile, the product price available to EU farmers is undermined by EU deals with non-EU countries to bring in cheap, sub-standard product, and supervision is, at best, patchy and, at worst, mainly left in the hands of officials from the exporting countries who as we have just seen in the Brazil case, can be easily bribed to allow all sorts of dodgy practices.

ICSA believes it is now high time that the agriculture chapter of the Mercosur talks needs to be abandoned. How could the EU possibly justify preferential trade deals with countries that are either unwilling or unable to deliver the quality that EU consumers want?

The scandal also will test if the the diplomatic efforts of successive ministers for agriculture, Bord Bia and the industry can deliver.

If ever there was a time to capitalise on trade visits to China, Hong Kong, south east Asia, and Saudi Arabia, this is it, as these countries are to the fore in banning Brazilian products.

Also, it is now time to reopen the Iranian embassy as the ICSA has repeatedly demanded. This should set off alarm bells for those pro-Brexit campaigners in the UK who have been quite blatant about doing trade deals all over the globe when the UK leaves the EU with a view to supplying British consumers with cheap food.


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