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Brazil's rotten meat scandal prompts major import bans

Crisis deepens in world's biggest beef and poultry-exporting nation as China and EU react to health certificate scandal.

China has suspended meat imports from Brazil over its rotten meat scandal while the European Union has called for a partial ban, deepening the crisis in the world's biggest beef and poultry-exporting nation.

The allegations that major meat-packing businesses bribed inspectors to get health certificates and masked tainted meat as fit for consumption prompted the decision by China, which with Hong Kong is Brazil's biggest meat-export market.

"Until it receives more information, China will not unload meat imported from Brazil," the Brazilian agriculture ministry said on Monday in an online statement.

Also on Monday, the European Commission, the EU's executive arm, called on Brazil to immediately halt exports by four companies implicated in the scandal, the bloc's spokesman Enrico Brivio said in Brussels.

Chile's Agriculture Minister Carlos Furche said on Twitter that his government was also imposing a "temporary" ban on meat imports from Brazil.

It said the ban would stay in place until Brazil confirmed that companies exporting meat to Chile had been correctly vetted.

President Michel Temer sought to calm the situation, saying Brazil's meat industry should not be judged by this one investigation.

"The agro-business for us in Brazil is very important and it should not be marred by a small nucleus [of bad actors], a small thing," he said, speaking to the American Chamber of Commerce in Sao Paulo.

READ MORE: Police in Brazil raid meat-packing plants in bribery probe

A day earlier, Temer called an emergency meeting with ambassadors of several countries. He assured them that national meats were safe and invited them to a Brazilian-style barbecue.

At least 30 people have been arrested in the scandal, with Brazilian police raiding more than a dozen processing plants.

A poultry-processing plant run by the multinational BRF group and two meat-processing plants operated by the local Peccin company were shut down, the agriculture ministry said.

Major hit

Brazilian meat is exported to more than 150 countries, with principal markets also including Japan, Saudi Arabia and Russia.

Sales in 2016 reached $5.9bn in poultry and $4.3bn in beef, according to Brazilian government data.

The scandal came at a time when Brazil is struggling to exit its worst recession in history.

Market analysis group Capital Economics warned the "developing scandal over Brazil's meat exports could plausibly derail the country's economic recovery".

"Brazil is facing a potential loss of export revenues of about $3.5bn. That's the equivalent of about 0.2 percent of GDP," Capital Economics said.

"The economic impact will depend to a large extent on how long any bans stay in place. There are some reasons for optimism here."

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