Meat scandal hits Brazil

Brazil meat scandal


Markets
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Brazilian federal authorities are investigating 40 meat companies after allegations of bribery of meat inspection officials and trade in tainted meat product.

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ALLEGATIONS of bribery of meat inspection officials and trade in tainted meat product emerged on Friday last week when Brazilian federal authorities revealed that investigations were being conducted into as many as 40 meat companies.

The issue has attracted huge worldwide attention because of claim that the illicit activity may have resulted in the export of contaminated meat product through falsification of documentation.

According to US meat-industry site Meatingplace, China has informed the Brazilian government that it will not allow Brazilian meat to enter its territory until it receives more information.

The report referred to Brazilian minister of agriculture Blairo Maggi announcing on Monday afternoon that China was the only country to communicate with Brazil over the investigations and that Brazil would respond to China in a videoconference scheduled for Monday night.

Brazil’s president Michel Temer attempted to contain the mounting crisis by summoning diplomats from importing countries to a briefing on Sunday at the presidential palace to explain that slaughterhouses are being properly audited and that Brazilian meat is safe to eat. The briefing was followed by an invitation to those who attended to join the president at a local steakhouse for lunch, a timely overture to emphasise the safety of Brazilian beef.

Meanwhile companies that may not have been implicated in the probe but nevertheless stand to lose by association have taken out full page advertisements and spots on television to deny any wrongdoing and emphasise their commitment to the highest levels of food safety.

Brazilian Beef Exporters Association (ABIEC) has also issued an official statement declaring that none of its 29 member-company beef plants have been named in the scandal.

But as an indication of just how damaging this whole episode may yet prove to be we need to look no further than Singapore, not the largest Brazilian market in Asia but an important one nevertheless.

Channel NewsAsia sought comment from Brazil’s ambassador to Singapore Flavio Damico who offered, “We see no reason for people to panic and we are open to working closely with the Singapore authorities to ease any worries”.

Telling people not to panic is probably a good way to escalate concern amongst a consuming public short on facts but at least some of Singapore’s key players in food retailing came out with positive messaging.

According to NewsAsia, a spokesperson for Dairy Farm Singapore, the parent of supermarket chains Cold Storage, Market Place, Jason’s, Giant hypermarkets and some 7-Eleven convenience stores, said it had received assurance from its suppliers that none of their brands and products are involved in the meat scandal and that none of their plants have been closed by the Brazilian authorities.

Other supermarket chains NTUC FairPrice and Sheng Siong were reported to be seeking clarification from suppliers and monitoring the situation while waiting to hear from Singapore’s Agri-Food and Veterinary Authority.

NewsAsia also observed that Changi Airport’s biggest ground handler SATS which provides in-flight meals is also looking into the matter. They reported vice president of public affairs and branding Carolyn Khiu saying “Food safety is a key priority for us”.

The implications are obvious when the Singapore experience is extrapolated to the vast markets of China, Hong Kong, Japan and the rest of the world: a compromised food safety reputation may be good reason to buy elsewhere in a business where diversified sourcing is increasingly available.

Well regarded US analyst Steiner Consulting has already observed in their Daily Livestock Report publication that a China ban could have favourable consequences for the United States.

The logic as they see it is that it could lead to China competing more aggressively for Australian beef which would make it more difficult for Japan and Korea to buy from Australia and therefore shift some of their demand to US product.

Just how well Brazil manages the fallout from this investigation remains to be seen.

At this stage the official line is this was just small scale opportunism with no measurable consequences in human health or wellbeing and the country’s vital meat inspection and certifying systems can be relied on.

A lot is riding on the extent to which international and domestic customers accept that explanation.

Kill unaffected by rain

WITH rain still coming down in places after some very good registrations in the early part of last week it was surprising to see that the weather has had virtually no impact so far on slaughterings.

MLA’s kill figures for last week put Queensland at 68,225, just 500 head fewer than the week before.

Similarly in New South Wales the week-to-week difference was just 12 head in last week’s total of 30,358.

Victoria was a different story with a 2000 head drop to 17,141 but that would largely be explained by lost production from the Labour Day public holiday last Monday.

Overall the eastern states total fell by 3000 head to 125,954 which puts the progressive count at 200,000 head or 14pc down on same period last year.

One large southern-Queensland processor I spoke to earlier in the week said that it was only this week that a few cattle had been lost to weather but that they were still pretty well placed.

At this stage it looks as if numbers are set to continue through to Easter but after that it appears less certain.

One thing that is not helping the Queensland cause as far as Channel Country cattle are concerned is the big price difference in over-the-hooks rates between Victoria/South Australia and southern Queensland.

Peter Kostos, market analyst for Stock & Land said earlier this week that ox rates had been as high as 600c/kg and were generally around the 580c range.

Some early Channel cattle are believed to have taken advantage of the extra money on offer in the south.

In southern Queensland rates remain unchanged on last week with four-tooth ox quoted at 500c/kg and heavy cow at 445.

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