| SAO PAULO/BEIJING, March 20
SAO PAULO/BEIJING, March 20 Fallout over a
Brazilian meat corruption scandal spread on Monday, with China
and South Korea suspending some imports, the European Union
mulling action and shares of meatpacking companies BRF SA
and JBS SA dropping.
China, Brazil's top trade partner, decided to suspend the
import of meat products from Brazil as a "precautionary
measure," said a source who requested anonymity because of the
sensitivity of the information.
South Korea's agriculture ministry said in a statement that
it would tighten inspections of imported Brazilian chicken meat
and temporarily bar sales of BRF chicken products.
The South Korean ministry said suppliers of Brazilian
chicken would have to submit a health certificate issued by the
The actions came after Brazilian police investigation on
Friday named BRF, JBS and dozens of smaller rivals in a major
investigation of alleged bribery of health inspectors to hide
unsanitary conditions in plants.
Police conducted raids on Friday in six states to seek more
evidence, tarnishing one of few vibrant sectors in Latin
America's biggest nation, which is suffering its worst recession
The two-year probe, known as "Operation Weak Flesh," found
evidence that meatpackers paid off inspectors and politicians to
overlook practices including processing rotten meat and shipping
exports with traces of salmonella, police said.
Shares of BRF SA fell 8 percent and JBS SA
dropped 5 percent on Monday. The companies have
strongly denied any wrongdoing.
Shares of Minerva SA and Marfrig Global Foods SA
, which are not involved in the investigations, also
fell sharply as traders fretted over the possibility of further
Credit Suisse Securities analyst Victor Saragiotto wrote in
a Monday note to clients that the scandal "could be enough to
compromise temporarily Brazilian protein's acceptance
Brazil exported $6.9 billion of poultry and $5.5 billion of
beef worldwide last year, according to industry groups.
More than 80 percent of the 107,400 tonnes of chicken
imported by South Korea last year came from Brazil, and almost
half of that was supplied by BRF.
The European Commission said it would monitor meat imports
from Brazil, and any companies found to be involved in a meat
scandal there will be denied access to the European Union
market, a spokesman said.
"The Commission will ensure that any of the establishments
implicated in the fraud are suspended from exporting to the EU,"
a spokesman for the European Commission told a media briefing.
The Commission said the scandal would have no impact on
negotiations between the European Union and South American bloc
Mercosur about agreements on free trade.
(Reporting by Bruno Federowski and Brad Brooks in Sao Paulo,
Dominique Patton in Beijing, Robert-Jan Bartunek in Brussels and
Jane Chung in Seoul; Editing by Daniel Flynn and Lisa Von Ahn)