EU bans 20 Brazilian meat plants, hits 35 percent of exports

BRUSSELS/SAO PAULO (Reuters) - Europe’s decision to ban meat imports from several Brazilian suppliers affects 30 to 35 percent of the country’s exports to the bloc and will force companies to find new markets while officials work to reverse the measure, Brazil’s Agriculture Minister said.

FILE PHOTO: Chicken are pictured at a poultry factory in Lapa city, Parana state, Brazil, May 31, 2016. REUTERS/Rodolfo Buhrer/File photo

The European Union on Thursday suspended imports of Brazilian meat products, mostly poultry, in a move that affected 20 plants in the South American nation that had been authorized to export to the EU, according to a European Commission statement.

“I was in Europe last week and we were waiting for a definition of how many, if any plants, were going to be de-listed,” Minister Blairo Maggi told reporters in Paraná after the measure was unveiled.

“We need to start talks to reestablish these plants as soon as possible,” he said.

Maggi noted the Brazilian government would request that a trade mission be allowed in Europe to negotiate a reversal of the measure. Meanwhile, he said, Brazilian companies “will have to search for new markets to quickly substitute these exports.”

The ban also dealt a blow to Brazil’s largest chicken processor, BRF SA, which had 12 plants delisted by the EU after its involvement in a food safety investigation.

Twenty plants were affected by the EU’s decision, eight of which were operated by smaller companies, according to a draft document related to the decision seen by Reuters on Thursday.

JBS SA, Brazil’s second-largest chicken meat producer, had no plants affected by the ban, a source close to the matter told Reuters on condition of anonymity.

BRF did not have an immediate comment on the ban. JBS declined to comment.

BRF stock, which rose 10 percent in early trading, pared gains to close 4.9 percent higher despite the setback. BRF shares soared after top shareholders on Wednesday agreed to appoint a new board chairman who investors felt could pull off a successful turnaround.

Earlier in the week the Brazilian government threatened to file a complaint to the World Trade Organization (WTO) to discuss its claims that the EU chicken import quotas breached global trade rules.

The government affirmed its intention after the EU decision on Thursday, claiming European trade restrictions were “not a health issue.”

Brazil’s basic argument is that, when domestic companies that export chicken have to pay a 1,024 euro tariff per ton, health demands are relaxed. “This will be what we will complain about at the WTO,” Maggi said.

The EC said the ban was related to “deficiencies detected in the Brazilian official control system.” The ban will apply 15 days after the publication in the official journal of the European Union, it added.

Reporting by Samantha Koester in Brussels and Ana Mano and Paula Laier in São Paulo; Editing by Francesco Guarascio, David Evans, Tom Brown and Richard Chang