April 18, 2018 / 2:26 PM / a year ago

Brazil lifts embargo on some BRF plants ahead of potential EU ban

SAO PAULO (Reuters) - Brazil’s largest chicken processor BRF SA has been allowed to resume production at nine plants that export to the European Union, the Ministry of Agriculture said on Wednesday, a day before a potential EU ban related to a food safety scandal.

FILE PHOTO: A meatpacking company BRF SA's logo is pictured in Sao Paulo, Brazil March 17, 2017. REUTERS/Paulo Whitaker/File photo

The ministry confirmed the contents of a document seen by Reuters, dated April 17, which had listed eight BRF plants as benefiting from the decision.

The ministry clarified that one more plant had been cleared, referring to a firm appearing in the document as SHB Comércio e Indústria de Alimentos SA, which is also controlled by BRF.

News of the decision lifted BRF’s shares in early morning trade. Later in the day shares soared almost 10 percent after a news outlet reported Pedro Parente, chief executive of oil company Petroleo Brasileiro SA, could be the food processor’s next board chairman.

The ministry preemptively suspended production and health certification of BRF’s poultry exports to the EU in mid-March due to a food safety investigation. The embargo had affected 10 production units, BRF said at the time.

“With Europe signaling a de-listing of these (nine) slaughterhouses, and lacking technical reasons to do so, we suspended the measure,” Luís Rangel, agriculture defense secretary, said in a statement regarding the self-embargo suspension.

But the agriculture ministry’s decision may bring only temporary relief to the company, with exports from several BRF poultry plants facing a possible ban as early as Thursday.

A draft proposal is pending before the European Commission’s standing committee on plants, animals, food and feed. The committee will determine whether “to delist certain Brazilian establishments from which imports of products of animal origin are currently authorized.”

Brazil’s Agriculture Minister Blairo Maggi said the country would launch an effort to appeal the potential EU ban before the World Trade Organization.

Maggi’s frustration came after almost a month of Brazil’s self-imposed embargo, when talks with the European Union ended without any guarantees that Brazilian chicken imports will be allowed in without restrictions.

Brazil’s southern Santa Catarina state, which sends 15 percent of its chicken exports to the European Union, welcomed the move.

Three of the eight plants affected by the ministry’s decision are based in the region. Santa Catarina chicken exports to Europe totaled $365 million last year, the state government said in a statement.

“Chicken is our main export product to Europe,” noted Airton Spies, Santa Catarina’s agriculture secretary.

BRF’s Nova Mutum and Capinzal units, located respectively in Mato Grosso and Santa Catarina states, do not show up in the list of units cleared by the Brazilian government.

Reporting by Ana Mano, Raquel Stenzel and Paula Laier in São Paulo; Editing by Marguerita Choy and David Gregorio

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