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Brazilian meat scandal: Confidence in $14bn industry is returning

The scandal to hit the meat industry in Brazil at one stage threatened to result in the sort of bans on a food product not seen since the BSE crises occurred in the United Kingdom in the 1990s. Although the more salacious accusations reported in the press have come to nothing, many serious accusations resulted in the erection of import bans; China stopped all imports of Brazilian meat, whilst the EU only prevented access from the affected plants. But now the worst consequences appear to have been avoided and the import bans have largely been dismantled, raising confidence in a swift recovery of an economically important industry to Brazil.

The diplomatic efforts from the Ministry of Agriculture were important in the growth of confidence in the idea the industry will recover following a 22% decline in pork and poultry sales compared to April last year. Agriculture Minister Blairo Maggi went to great lengths to publically restore confidence in order to halt the growing perception that Brazilian meat was unsafe. His efforts paid off. Nearly all import bans have since been lifted. Nobody can be precisely sure that sales will immediately return, but in securing an end to import bans the minister has provided the industry with the best possible chance.

Even though many countries imposed restrictions on meat imports, the United States is notable for not doing so. A new trading partner in meat, particularly beef, since last year, many in the political establishment did not want to destroy a deal two decades in the making. For Brazil, having continued access to the United States is important. Observers say $900m has been added to the value of Brazilian exports to the US. Commitment to the arrangement has been helped by the relatively contained scope of the scandal. Although 21 affected plants and 63 people subject to criminal trials appear bad, the size of the industry means the most severe outcomes could have been much worse.

Posted in Agriculture, Food.

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