JBS, one of the Brazil-based meat processors at the centre of corruption allegations, has refused to be drawn on a report it is considering suspending the flotation of its overseas operations.
Brazilian newspaper Folha de S.Paulo claimed JBS will decide in the coming days whether to put on hold the listing of JBS Foods International.
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By GlobalDataApproached by just-food, a spokesperson for JBS said: “The company will not comment on this matter.”
Reuters, meanwhile, said an unnamed source involved in the IPO told the newswire JBS had no plans to delay the flotation of the overseas unit.
JBS has been planning to list JBS Foods International unit, which is headquartered in the Netherlands, in New York.
JBS Foods International will include JBS’s global businesses as well as its value-added unit Seara. The company said it expects to complete the IPO in the first half of 2017.
Under the plans, JBS will retain control of the new unit, as well as continuing to manage the company’s Brazilian beef operations on a stand-alone basis. Wesley Mendonça Batista, JBS’s CEO, will be the chairman of JBS Foods International.
JBS is among the Brazilian meat companies to feature in a probe by the country’s federal police that claims a number of processors paid politicians and inspectors from its Ministry of Agriculture to overlook unsanitary practices, allowing them to manufacture adulterated products. Police claim ministry officials in the states of Paraná, Minas Gerais and Goiás acted to protect the companies. Some 21 plants are under investigation.
Brazil’s federal revenue agency allege the corrupt inspections resulted in adulterated products being allowed to be sold for human consumption circulating freely in the domestic market, serve as school snacks or being exported.
On 17 March, after the investigation was announced, JBS issued a statement to say police had conducted raids at several Brazilian companies, which involved three of its own facilities – two in Paraná and one in Goiás.
The company said no judicial measures have been taken against the company’s executives and underlined its headquarters were not a target of the operation.
However, JBS admitted “a judicial measure” was issued at one of its facilities in Paraná against one of its veterinarians, who performs auxiliary inspections services for the Ministry of Agriculture.
“The company strongly repudiates any practices related to product adulteration or tampering, whether in the production or sale of products, and it is available to address any concerns with the authorities,” JBS said.
The Brazilian government has attempted to emphasise the probe is focusing only specific incidents and it has sought to talk up the quality of the country’s meat industry.
Blairo Maggi, Brazil’s agriculture minister, has met with diplomats to try to assure the country’s international customers of production and quality control.
JBS last week revealed it had halted output at 33 of its 36 domestic plants in the wake of the investigation.
The company made the announcement in a filing after the Brazilian stock market asked the company to clarify a newspaper report that said the group had reduced its slaughtering by 25-30%.
“The company, through this clarification, informs its shareholders and the market in general that it suspended, for three days, the production of beef in 33 units of the 36 that the company maintains in Brazil,” JBS said. “For next week, the company will operate in all its units with a reduction of 35% of its productive capacity. These measures are aimed at adjusting production until there is a clarification of the embargoes imposed by Brazilian beef importing countries.”
Brazil last faced week a stream of markets issuing bans or restrictions on its meat exports.
Earlier this week, Chile, China and Egypt all either fully removed or eased bans on Brazil’s meat shipments.
China, one of Brazil’s largest meat customers, lifted its ban on imports of all meat from the South American country except from one plant that has been named among the 21 under investigation by the Brazilian police.
Brazil has itself banned exports from the 21 sites. According to Reuters, the only one of the 21 facilities that had been shipping to China is owned by a unit of JBS.
Meanwhile, Reuters said today the Brazilian government had order a further three of the 21 to suspend production, taking the total told to halt output to six.
