Apology incoming! Carrefour caught in South American beef scandal

Alexandre Bompard, Carrefour SA's CEO, has agreed to issue a public apology to Brazil's government, hoping to wrap up the controversy created by the supermarket chain committing to not sell South American beef in France, according to Bloomberg.

French ambassador Emmanuel Lenain is reportedly trying to arrange a meeting with Carlos Favaro, the Brazilian Agriculture Minister, to issue this apology. The former is also expected to reemphasise the quality of Brazilian meat during this meeting.

Following this, Carrefour is also expected to issue a statement in both Brazil and France, with the justification that it has always only sold French meat in France.

This follows Carrefour’s support for French farmers' protests against a trade agreement between the European Union and the South American bloc Mercosur, which has sparked a strong reaction in Brazil, including a refusal to supply beef to Carrefour stores in Brazil.

Bompard announced on social media posts last week that the French company would stop buying beef from all Mercosur countries, which also include Argentina, Paraguay and Uruguay. Bompard wrote that he agrees with French producers' arguments that Mercosur beef is an unfair competitor due to lower production costs resulting from fewer environmental and sanitary requirements.

The executive encouraged other retailers to follow suit.

Brazil's Ministry of Agriculture called Bompard's move protectionist, saying it was made “without any technical criteria.”

The decision also angered Brazil's meatpackers. Though France makes up just a tiny percentage of Brazil’s beef exports, meatpackers are concerned that Carrefour’s decision would hurt its reputation in other markets.

Beef giants JBS and Marfrig halted supplies last Friday to Carrefour's extensive supermarket chain in Brazil, including the food warehouse giant Atacadao. Both companies refused to comment on the boycott to The Associated Press, but Minister of Agriculture Carlos Fávaro, confirmed it.

“We support the reaction of the meatpackers. If Brazil´s beef isn’t good enough for Carrefour’s shelves in France, it isn’t good enough for Carrefour’s shelves in Brazil either,” Faváro told Folha de S.Paulo newspaper on Monday.

Carrefour Group in Brazil acknowledges Brazilian boycott

Carrefour Group in Brazil acknowledged the boycott in a statement, though it said there's not yet a shortage of beef in stores. It said it has “esteem and confidence in the Brazilian agricultural sector, with which it maintains a solid relationship and partnership.”

“Unfortunately, the decision to suspend the meat supply has an impact on customers, especially those who rely on the company to supply their homes with quality and responsible products,” the statement said. “It is in constant dialogue in search of solutions that will make it possible to resume the supply of meat to its stores as quickly as possible, respecting the commitments it has to its more than 130,000 Brazilian employees and millions of Brazilian customers countrywide.”

The backdrop for the conflict is the EU-Mercosur trade deal, which would increase agricultural imports to EU countries from South America. French farmers fear it will affect their livelihoods. An initial agreement was reached in 2019, but negotiations have faltered since then due to opposition that also includes some European governments.

Brazil’s agribusiness sector also fears that the pending European Union Deforestation Regulation will outlaw the sale of forest-derived products within the EU’s 27-nation bloc if companies can’t prove their goods are not linked to deforestation. Its scope includes soy and cattle, Brazil’s top agricultural exports. Almost half of the country’s cattle is raised in the Amazon region, where 90% of deforested land since 1985 has turned into pasture, according to MapBiomas, a nonprofit network. The date of its implementation remains uncertain.

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