Following regional and international events and putting phenomena and events into examination and analysis, I always look for the complete picture. I have followed the recent controversy in Brazil where major officials were found involved in corruption in meat exports.
The emerging Brazilian economy heavily relies on exports of meat. Brazil is the largest source of frozen red meat in the world. Exports of beef and chicken meat are about 11 billion dollars annually. Poultry exports were valued at approximately 5.9 billion dollars in 2016, while exports of red meat in the same year were about 4.3 billion dollars. But there is a problem in the meat sector in Brazil similar to crises in the oil for major oil exporters such as Saudi Arabia. Brazil meat export to the Gulf and Arabic countries is important. The country’s exports to Arabic countries were valued at 2.8 billion dollars in the first nine months of 2016.
The crisis reportedly revealed rotten meat export to many countries for years. The corruption scandal in Brazilian meat market probably came at a bad time for this vital sector, after frozen Brazilian meat has just returned to the US markets last August after 17 years. There were expectations that Brazilian meat exports will reach about 400 million dollars a year, which is a small number compared to the Australian meat exports to the United States. The US has banned Brazilian beef in 2010 because of health reasons related to quality. The US resumed import in 2012. The ban was imposed on frozen meat only.
International trade of meat represents the backbone of several States’ economies. This huge trade approaches about 100 billion dollars or more. There are about 160 countries that import meat and poultry products, which reflects a high reliance on meat-exporting countries to meet local needs, notably Brazil, Australia, the Netherlands, Ireland, New Zealand and India.
We can understand the concerns of the Brazilian political leadership since the corruption case was found. Brazilian President, Michel Temer, reassured foreign countries about the safety of exported products. Michel held a quick meeting with ambassadors from Europe, the US and China to send messages of trust on the quality of Brazilian meat and on tightening control and monitoring over the markets.
The scandal involves three of the biggest meat-packing factories accused of selling rotten products for several years. The Brazilian authorities are conducting extensive investigation and many managers in this industry were interviewed and accused of receiving bribes to cover up the scandal. 33 inspectors out of 11 thousand working in this huge sector were dismissed by the government to mitigate the impact of the crisis on foreign consumers.
This scandal surely agitated most consumers and food control authorities. Brazil exports red meat to nearly 150 countries. Despite the strictness of the EU censorship, Brazilian sources have confirmed that some rotten meat entered Europe. This explains the Brazilian President’s meeting with the ambassadors of some European countries.
Brazilian President’s managed the crisis well. Michel Temer immediately took the initiative and was keen to reveal the facts. He stressed that the Brazilian Ministry of agriculture will soon publish a list of the States which have received rotten beef as well as the meat-packing companies responsible for it, adding that a special committee will be created to speed up the investigation process with involved factories. In an official statement, the president also confirmed that meat-packing plants are subject to investigation by States that import Brazilian beef. In a funny gesture during a meeting with ambassadors, the President invited them to dinner at a restaurant that serves traditional grill meals of Brazilian meat.
Although the management was strict, the crisis and investigations and periodic examination involve only 21 firms, out of 4800 firms working in meat-packing, the scandal involves firms that belong to the largest beef exporter and the largest producer of poultry meat in the world.
As usual, any economic scandal has a political dimension. The investigations revealed that the two companies bribed two major Brazilian parties. One of the two parties is the Brazilian Democratic Movement party which is led by President Temer.
Clearly, investigations have been going on for about two years, during which many have consumed good and rotten meat. Corruption is the same everywhere.
The mafia of rotten meat used chemical and carcinogenic substances to hide spoilage. In other cases, investigations showed that potato was mixed with water and even cardboard with poultry meat to increase profits. The mafia resorts to the same practices of fraud we find in other places of the world and maybe corruption is the same everywhere.
