Brazil in mother of all food fraud cases

Brazil, the largest exporter of meat products in the world, faces a food fraud crisis — and it seems federal authorities have been complicit.

There’s a lesson here for Canada.

Brazilian authorities recently announced they would investigate several companies, including meat packing giants JBS SA and BRF SA. The companies are accused of bribing licensed inspectors to approve rotten meat products for international sale and export.

Given that the companies and government are allegedly involved, this could become one of the worst food fraud scandals in modern times.

The investigation, dubbed Operation Weak Flesh, began more than two years ago and still isn’t finished. More than 40 companies and several bureaucrats are involved.

This is a textbook case of economically motivated food adulteration. Various animal parts were allegedly used as substitutes for more expensive ingredients or products. Any suspicious smells were allegedly camouflaged through the use of acid, a food safety nightmare.

It appears these products were delivered to schools, hospitals and other institutions. Even Walmart is a buyer and has requested an explanation about the risks in-volved.

As we often see in food fraud cases, every company involved is denying all allegations.

Brazilian meat product exports account for more than $14 billion, and are distributed to many parts of the world, including Asia and Europe. That could decline significantly. Share values for JBS SA and BRF SA have fallen.

Given the political and economic climate in Brazil, this couldn’t have happened at a worse time. The economy is mired in one of the deepest depressions in its history, and the country is dealing with the aftermath of the high-profile Petrobras scandal, which also involved the public and private sectors.

This new scandal will hit agri-food, one of Brazil’s largest economic sectors, very hard.

It also strikes yet another blow to the global livestock industry. It gives more ammunition to those opposed to the industrialization of agriculture and the role of agribusinesses. Questions about the sustainable and ethical nature of massive livestock production have abounded for years. As a result, consumers in the industrialized world are increasingly reducing their intake of animal protein, particularly beef.

Nonetheless, agri-food firms exist to make food systems more efficient and food more affordable. Society has benefitted from these corporations, whether we realize it or not.

For that beneficial relationship to endure, ethics must play a key part. Even if most companies operate by upholding shared values with consumers, there are those that spoil it for everyone else.

That’s obviously shameful.

Public policy exists to protect consumers, but ill-designed regulations can lead to market failures, compounding the fallout.

In Brazil, licensed companies have a direct influence over who inspects their facilities. Inspectors are only human and can be compromised.

Had a proper regulatory framework been in place, this scandal could likely have been prevented.

It took Brazil decades to convince the world its meat products were worthy of export. Actor Robert de Niro was even a spokesperson for the industry. Operation Weak Flesh could destroy this reputation completely. A number of countries have called for sanctions on Brazilian meat products, and some have already been implemented.

Canada, as one of Brazil’s main livestock industry competitors, will likely gain from all of this. Canadian ranchers are very aware.

However, let’s hope arrogance won’t make our sector complacent again, as we witnessed with the BSE mess in 2003. We must learn from that and from what has happened in Brazil.

Canadian livestock and meat scandals were a cakewalk compared to what’s going on in Brazil. But with food fraud, which is often complicated, you can never be too careful.

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