Canada suspends meat imports from 2 Brazil plants in food scandal

The Canadian government has suspended imports from two Brazilian meat producers under investigation for allegedly doctoring and selling rotten meat while paying officials to turn a blind eye. 

The Canadian Food Inspection Agency announced earlier this week it was banning beef and poultry products from JBS and BRF, two of the world's biggest meat companies.

Some other jurisdictions went further: Argentina, Chile, Mexico, Japan and the European Union have banned imports from those producers as well as the other 20 smaller plants implicated in the investigation. On Thursday, China also confirmed a ban after its initial ambiguous measures left hundreds of tons of meat adrift at sea and shipping companies unable to deliver meat or use the country's ports as their transshipment points, as they usually do.

2-year investigation

The scandal emerged last Friday after Brazil's national police announced the findings of a two-year investigation involving the meat producers' practices and alleged corruption among some government officials.

The investigators allege that JBS and BRF disguised inedible beef, pork and chicken, bound for both domestic consumption and export, by injecting the meat with chemicals and acids to improve its appearance and smell; by mixing expired meat with healthy meat; and by fleshing out meat that was considered weak with water and low-cost starch, such as manioc flour.

Both companies deny any wrongdoing, while Brazilian politicians downplayed the scandal. Ministry of Agriculture spokesperson Eumar Novacki said at a news conference that consuming meat from these companies posed only "very small risks" for consumers, while Brazilian President Michel Temer called the scandal "a fuss."

That has done little to reassure the 150 countries that the two companies export to. 

"The reputation of Brazilian beef, and indeed all Brazilian agricultural product, will be tarnished — I have no doubt about that," Prof. Chris Elliot, founder of the Institute for Global Food Security, told CBC News. "For Brazil, being such a large meat-producing country and exporting so much across the world, it seems to be quite remarkable that there's such a widespread fraud going on."

High-level corruption

Investigators say Operation Weak Meat uncovered evidence of bribes paid to Brazilian officials, including some at the federal Ministry of Agriculture, to look the other way. Police issued 38 arrest warrants and closed 21 meat-packing facilities for further inspection.

Brazil's federal Justice Minister, Osmar Serraglio, was allegedly caught on tape calling one of the inspectors under investigation "big boss" in a phone conversation with one of the leaders of the bribery scheme in Parana state.

Serraglio, who oversees the investigating police force, said the police raids prove he is not interfering in the inquiry. Police in Brazil said there was insufficient evidence to launch a separate investigation into the minister's involvement. 

Prof. Decio Zylbersztajn, founder of Agribusiness Intelligence Center-PENSA, told CBC News in an email that he was not surprised by the scandal.

"Agribusiness is not more or less involved with corruption than any other sector," Zylbersztajn said. "Opportunism is a reality that must be faced by governments and corporations."

Brazil exported $5.9 billion worth of poultry and $4.3 billion worth of beef in 2015, with Japan, Russia and the Middle East being its principal customers. JBS and BRF account for a significant percentage of this trade.

Canada imports US $53 million worth of animal products from Brazil every year, according to MIT's Observatory of Economic Complexity, but there's no way of knowing how much Brazilian meat really makes it into Canadian supermarkets because the global supply chain is complicated.

Elliott says tracing a meat product's end destination is trickier than it seems. It is "absolutely" possible that the U.S. — which bought US $297.8 million of Brazil's meat in 2016 — processes meat from Brazil and sells it on to Canada.

"One of the most complicated supply chains in the world is red meat, particularly processed red meat," said Elliott. "Food is a true global commodity, and knowing where your food comes from is close to impossible in many cases."

Economic implications

Brazil relies on agribusiness as a key sector for stability as it struggles to pull itself out of recession. But Prof. Felippe Serigate, of the Sao Paulo School of Economics of Getulio Vargas Foundation, told CBC News he doesn't expect the scandal to impact Brazil's economic recovery.

"Although the meat sector is important, the economy isn't going to grow more or shrink because of these events," Serigate said. "There are very few economic sectors that could, in isolated form, destabilize the Brazilian economy," said Serigate.

However, Elliott anticipates the scandal will have worldwide consequences, provoking a rise in commodity prices globally. He also believes that similar arrangements — bribing officials to grade unsuitable meat as edible for consumption — will be uncovered in other countries that export large amounts of meat, as importers begin tighter inspections after Brazil's revelation.

"Over the next few weeks, you will see that this scandal will spread," he said. "It's not just Brazil."