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Business

Brazil tries to contain damage from meat scandal

Amid a scandal over the sale of rotten meat, Brazil's government has been bending over backward to assure foreign consumers there has been no health threat. The president himself chose to deal with the matter.

In a desperate move to prove that Brazilian meat was safe, President Michel Temer on Sunday night invited ambassadors to a steak dinner against a backdrop of allegations that corrupt exporters had sold deliberately mislabeled rotten meat.

The scare started at the end of last week, when police raided more than a dozen processing plants. Three facilities were shut down right away and at least 30 people were arrested after it became known that bad meat had been sold and fraudulent certificates issued.

In some cases, carcinogenic chemicals had been used to mask the smell of the meat, authorities confirmed.

Mercosur deal in jeopardy?

Brazil has suffered from two years of recession. The meat industry has been one of the few bright spots in Latin America's biggest economy. 

Meeting ambassadors, Temer had the daunting mission of calming the scandal, which was threatening the reputation of the world's biggest exporter of beef and poultry. Brazilian meat is shipped to 150 nations; sales last year reached $5.9 billion (5.48 billion euros) in poultry and $4.3 billion in beef, according to government data.

In Temer's address to the ambassadors (only 19 out of 33 took him up on the invitation), the president acknowledged that the scandal had caused "major concern."

But he insisted that the tainted meat occurred in "only a very few businesses" and did not represent a wider problem.

Brasilien Fleischskandal (picture-alliance/Estadao Conteudo/N. Caardin)

Brazil's food safety authorities have intensified their investigations following raids on Friday which found that 21 of more than 4,800 meatpackers in operation were affected by the scandal.

There were worries, though, that the recent revelations could hurt attempts to negotiate a trade deal between South America's Mercosur group and the European Union. That's because the countries which are party to trade deals must not only have good reason to be confident that each others' regulations are properly designed to protect consumers - the regulations must also be properly implemented. 

The fallout continues 

So far Germany has not been affected. Gero Jentzsch from the German Butchers’ Association says that he only knows what is being published in the press and that we must wait to see what the investigations reveal.

Nonetheless, he calls for better structures in the agriculture and meat industries, which would make transparency and traceability easier for consumers. "A close relationship between farmers and butchers, as well as a personal relationship between butchers and their customers would be an ideal situation."

But for Brazil the knock-on effects of the scandal keep coming. China and Chile have both now temporarily suspended imports of Brazilian meat. Though a source told Reuters that China's temporary ban is only a "precautionary measure." 

Shares of Brazilian meatpackers BRF SA and JBS SA slumped on Monday. Even shares of Minerva SA and Marfrig Global Foods SA, which are not involved in the investigations, likewise fell sharply as traders fretted over the possibility of further import bans.

The threat to Brazil's reputation as the world's biggest beef and poultry-exporting nation keeps growing.

Watch video 01:52

Rotten meat scandal to hit Brazil's exports

hg/tr (AP, AFP, Reuters)

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