(Updates throughout with details from minister, Walmart barring
some meat products, quotes from consumer group and analyst)
By Maria Carolina Marcello and Brad Brooks
BRASILIA/SAO PAULO, March 22 A police
investigation into alleged unsanitary and corrupt practices has
badly damaged the reputation of Brazil's meatpacking industry
and could wipe more than 10 percent off its global market share,
Agriculture Minister Blairo Maggi said on Wednesday.
Maggi, a former state governor and a billionaire soy farmer,
told a Senate Committee that his main concern was that China and
Hong Kong have not yet taken a definitive stance on their bans
of meat from Brazil, the world's biggest producer of beef and
China and Hong Kong are the top two importers of Brazilian
meats, last year buying nearly one-third of the $14 billion
worth of meat that Latin America's largest economy exported.
Maggi, speaking before a joint Senate committee, told
lawmakers that if the government does not take quick action to
tamp down the scandal, it could take Brazil up to five years to
recoup the global market share it would lose.
The minister added that before the police investigation was
made public last week, Brazil typically exported $64 million
worth of meat a day, but that figure dropped to $74,000 on
The two-year investigation dubbed "Weak Flesh" has lodged
accusations against more than 100 people, mostly health
inspectors, for taking bribes and allowing the sale of rancid
products, falsifying export documents, or failing to inspect
meatpacking plants at all.
The probe by Brazil's federal police comes amid a sprawling
three-year investigation into billions of dollars in political
kickbacks paid by construction giants to win contracts with
state-controlled firms, especially oil company Petrobras.
Hong Kong, Japan, Canada, Mexico, Switzerland and South
Africa have all announced partial or all-out bans on Brazilian
meat imports this week, following measures similar to those
taken by China, the European Union, South Korea and Chile.
The industry took a domestic hit Wednesday, as Walmart
Brasil said in a statement that it had suspended the sale of all
products from 21 processing plants named so far by police as
The Brazilian government had already banned exports from
those 21 plants - but allowed them to continue production and
sales to the domestic market, a move that has angered some
"Is the health of a Brazilian consumer not worth the same as
that of a foreigner?" said Sonia Amaro, head of institutional
relations at the Proteste consumer protection group. "Brazilian
industry has a history of this, of offering inferior or
dangerous products to domestic customers while sending better
Maggi and other government leaders have aggressively tried
to assure the public that this is not the case and that the meat
supply does not pose any health risks.
They say the problems uncovered by police are isolated
events, that those involved will be fired, and that the
investigation focuses mostly on corruption, not tainted
But Rafael Alcadipani, a professor of organizational studies
at the Getulio Vargas Foundation in Sao Paulo, refutes the
He said too little is yet known about the findings of the
ongoing investigation, and that corruption is possibly a worse
finding than batches of rotten meat. If inspectors were paid to
not do their jobs, it is impossible to know if putrid products
entered the market, Alcadipani said.
"Because Brazil has the world's biggest meatpackers, those
businesses have huge influence with the government, so the
government will go to all lengths to protect them," he said.
"Officials are clearly trying to focus attention away from
the central question, which is whether or not there is
systematic corruption in the sanitary system. Only allowing the
investigation to play out will answer that."
(Reporting by Maria Carolina Marcello in Brasilia and Brad
Brooks in Sao Paulo; Writing by Brad Brooks; Editing by Daniel
Flynn and Lisa Shumaker)