BRASILIA (Reuters) - President Michel Temer, confronting a corruption scandal tarnishing Brazil’s lucrative meat industry, met on Sunday with executives and foreign diplomats to assuage health concerns tarnishing a sector responsible for $12 billion in annual exports.
The hastily called meetings, following raids by police on Friday investigating whether companies paid bribes to conceal unsanitary conditions at meatpackers, come as Temer works to protect one of the few vibrant sectors in Latin America’s biggest economy, hit by two years of recession.
The inspection scandal throttled the share prices of JBS SA (JBSS3.SA), the world’s largest meat producer, and poultry exporter BRF SA (BRFS3.SA), after both were targeted in “Operation Weak Flesh” along with dozens of smaller rivals.
Addressing diplomats from Europe, the United States, China and elsewhere, Temer said Brazil’s government “reiterates its confidence in the quality of a national product that has won over consumers and obtained the approval of the most rigorous markets.”
Temer, who even took some of the diplomats to a lakeside steakhouse after the meeting, portrayed the raids as isolated, if necessary, efforts against corruption. He sought to dispel fears of systemic flaws in a sector that is now the world’s largest exporter of beef and several other meat products.
He said investigators would accelerate the probe and underscored that Friday’s raids affected just 21 of more than 4,800 meatpackers in operation. Only 33 of more than 11,000 inspectors, he added, are being investigated.
Despite allegations by police that some producers had sold rotten and adulterated meat products, Luis Eduardo Rangel, a senior Agriculture Ministry official, said: “There is no sanitary risk.”
The allegations, he added, were “worrisome from a corruption and crime point of view,” but “from a health perspective we are very confident that the sanitary issues alleged do not represent a risk for consumers or exports.”
As such, government officials after the meeting were quick to point out that Brazil’s success as a meat producer in part stems from what has been an efficient and highly-regarded system of sanitary controls. They noted that none of the more than 150 countries that already buy Brazilian meat has suspended imports.
Still, some customers are wary.
“You cannot play around with food,” said André Regli, Switzerland’s ambassador to Brazil, adding the problems were “worrying.”
On Saturday, officials from the European Union said they sent two letters to Brazil’s government seeking details about any systemic risks to imports. China’s government asked for similar information.
Brazilian officials said they would address E.U. and Chinese concerns on Sunday.
On Friday, regulators from the United States, which recently began importing fresh beef from Brazil, said they were monitoring the issue but that inspections at import terminals there should prevent any health risks.
After Sunday’s meeting, the head of Brazil’s powerful farm association said he hoped for fast and severe punishment for those caught breaking laws.
“We producers are victims of this,” said João Martins, president of the National Agriculture Confederation, speculating that the price of Brazilian beef could fall in the coming days.
In damage-control efforts, Brazil’s two biggest meat companies launched a public relations campaign over the weekend to make clear they did not sell rotten beef.
JBS and rival BRF took out full-page ads in Brazilian newspapers and magazines on Saturday defending their business practices and internal controls. They condemned any wrongdoing uncovered by the probe.
Additional reporting by Paulo Prada; Editing by Sandra Maler and Mary Milliken