Bad beef: UK supermarkets feed illegal deforestation fears as corned beef imports from corruption-hit Brazilian firm persist

Sunday, May 5th, 2019

  • JBS, world’s largest beef producer, has faced multiple corruption charges, complicity in modern-day slavery and was fined $8m in 2017 for illegal deforestation in the Amazon
  • Sainsbury’s, Lidl, Asda and Morrisons all continue to stock JBS corned beef products, along with Italian brand Simmenthal and European giant Carrefour, new Earthsight investigation reveals
  • EU retailers risk amplifying destruction of Amazon by continuing to stock JBS beef

Sainsbury’s, Asda, Lidl and Carrefour are among the international brands potentially fueling illegal deforestation in Brazil’s cattle industry as they continue to stock corned beef from a firm implicated in numerous environmental and human rights abuses.

A new Earthsight investigation exposes how scandal-hit Brazilian firm JBS, the world’s largest beef producer, is supplying UK and European supermarkets with corned beef products for their own brand products and via UK firm Princes, the Lebanese-owned Exeter brand and Italian brand Simmenthal.

Earthsight researchers found UK retailers Morrisons and Lidl source JBS beef for their own brands of corned beef, while Sainsbury’s and Asda stock Exeter and Princes corned beef supplied by JBS. Meanwhile, popular Italian brand Simmenthal uses JBS for its tinned products in supermarkets nationwide including in French giant Carrefour, which also stocks the product in its Belgian stores.

With Brazil currently experiencing decade-high levels of forest loss and Jair Bolsonaro’s far-right government intent on undermining environmental protections, European retailers questionable buying practices risk amplifying forest destruction in the Amazon, where over 60 percent of deforested lands are used for pasture.

The readiness of major brands to continue stocking JBS beef is a worrying trend. The firm, whose former executives were implicated in Brazil’s seismic Operation Car Wash corruption case in 2017, has been long-mired in scandal.

In 2017 JBS was found guilty of illegal deforestation in the Amazon and fined R$24.7 million ($8 million). The same year Brazil’s Federal Police said the firm bribed authorities to falsify expiration dates on its processed meat which was later sold domestically and overseas, while cattle farms used by the firm have been accused of modern-day slavery. New illegal deforestation or bribery scandals involving JBS have emerged every few months since. Most recently, in March 2019 prosecutors called on the firm to pay R$3.7 billion ($970 million) compensation for securing a series of fraudulent loans.

Sam Lawson, Earthsight director, said: “Grand corruption, modern slavery, illegal deforestation, tainted meat. You have to wonder what a supplier would have to do to get dropped by these supermarkets. The extent to which they continue to prioritise profit over principles is shocking. It is doubtful their customers would make the same choices when presented with the same facts.”

European demand soars

Alarmingly, appetite for beef from the Sao Paulo-headquartered firm, which has 350,000 staff in 16 countries and posted revenues north of $180 billion Reais ($46 billion) in 2018, is growing.

Its corned beef imports to the UK hit an estimated £42 million ($54 million) in 2018 – a near 25 percent rise on the previous year – and Bolton Alimentari, makers of Simmenthal, imported 2,600 tonnes in 2018, making it JBS’s third largest European importer.

The UK, Italy, the Netherlands, Belgium and Spain bought almost 90 percent of JBS’s 55,000 tonnes of European beef exports in 2018, Earthsight analysis of international trade data shows. Meanwhile, UK corned beef imports totalled 28,550 tonnes last year, 95 percent of which came from Brazil and nearly half from JBS.

Earthsight’s researchers found different varieties of Princes corned beef supplied by JBS at Sainsbury’s, Asda and Morrisons. Two of Morrisons’s own brand products are made with JBS produce, while some others are vaguely labelled as sourced from ‘South American’ beef. Earthsight approached Morrisons for clarification but did not receive a reply before publication.

JBS also supplies the beef used in Simmenthal, an Italian household tinned beef brand stocked by all major supermarkets in the country. Among them is French-owned Carrefour, one of the largest supermarket chains in the world, with over 12,300 stores in more than 30 countries. Earthsight researchers also found the product stocked in Carrefour stores in Belgium.

This burgeoning presence in the UK and Europe is a snapshot of the company’s exponential growth in recent years.

Brazil’s government sees JBS – which alongside beef, exports leather, pork and chicken to over 150 countries – as a national champion and the firm has benefitted from billions of dollars in subsidised loans from the state, helping it become one of the world’s largest food companies as revenues have ballooned 42-fold between 2006 and 2016.

Such growth and international reach – JBS now owns popular US brands Pilgrim’s and Swift – is offset by a dubious environmental record and a string of bribery allegations and illegal activity which has engulfed the firm.

Corned beef in UK supermarkets found to contain JBS meat. Copyright of Earthsight.

Illegal deforestation practices

Allegations of links to illegal deforestation in Brazil have plagued JBS for over 10 years. In one particularly notable recent case, in 2017 two JBS-owned slaughterhouses bought nearly 50,000 heads of cattle from ranches guilty of illegal deforestation in the Amazon. The company was fined R$24.7 million ($8 million). JBS denied wrongdoing and told Reporter Brasil, a news agency, at the time that “the company does not buy livestock from ranches that practice illegal deforestation”

The same year it was revealed that JBS had been buying thousands of heads of cattle from a farm owned by a notorious Brazilian cattle rancher known as Jotinha, who was arrested in relation to a massive illegal deforestation case in 2016. JBS bought R$5.9 million ($2.5 million) in cattle between 2013 and 2014 from Jotinha’s farms in Pará, northern Brazil – he is believed to be the single largest deforester in the Amazon’s history. His farms have also been sanctioned by Brazilian authorities for employing workers in conditions analogous to slavery.

The slavery revelations, first published by The Guardian and Reporter Brasil, led to British supermarket chain Waitrose removing all JBS corned beef products from their stores in 2017. Marks & Spencer also stopped stocking corned beef from Brazil in 2016. JBS told the Guardian it ceased purchases from the farm as soon as the slavery information became public.

Furthermore, in December 2018 it emerged that JBS had allegedly sourced cattle from at least four illegal farms operating at the Jaci-Paraná Extractive Reserve in the state of Rondonia, a protected area where large-scale cattle ranching is banned by federal law.

JBS has also reportedly purchased cattle from six farms located less than 10km from the reserve, which means they could potentially be laundering illegal cattle for farms at Jaci-Paraná. Illegal large-scale ranching at Jaci-Paraná has reportedly wiped out nearly half its forests. In an e-mail sent to Brazilian news organisation O Eco at the time, JBS alleged that the farms’ locations on their tracking system had been wrong. The company also claimed that it had been working to correct this mistake on its database.

JBS said in 2017 that it stopped buying from Jotinha’s farm after learning of the illegalities and that it does not buy beef from any farms associated with slave labour.

A web of corruption

The illegal farming activity of several JBS suppliers is complemented by a series of corruption cases which have dogged the firm in recent years. 2017 was a particularly bad year as alongside the high-profile Jotinha revelations, it emerged that JBS had been bribing sanitary inspectors to allow rotten meat to be sold in Brazil and abroad, The revelations of Operation Weak Meat, as the relevant enforcement operation was known, led the US and other countries to temporarily suspend meat imports from Brazil.

Bribery cases involving JBS stretch far beyond industry insiders though and reach into the highest echelons of Brazilian society. In May 2017 JBS was implicated in Operation Car Wash, one of the largest corruption scandals in Latin American history.

JBS admitted to having made illegal campaign donations to 1,829 candidates from 28 political parties over a period of more than ten years in return for favourable policies once candidates were elected. In total, nearly R$600 million ($250 million) was donated. J&F Investimentos, JBS’s controlling shareholder, agreed to pay a R$10.3 billion ($3.2 billion) fine for JBS’s role in the scandal, the world’s largest leniency fine ever levied.

The revelations led the Batista brothers, Joesley and Wesley – who own 42 percent of JBS – to turn informants. They entered a plea bargain with prosecutors and turned in explosive recorded conversations with then Brazilian president Michel Temer revealing their bribing of government officials. Joesley reportedly told Temer he was paying hush money to House Speaker Eduardo Cunha – now serving a prison sentence – in order to buy his silence on illegal dealings involving JBS. Temer allegedly replied with “You have to keep it going, OK?”.

Temer’s own dealings with JBS were also exposed and in March 2019 a Brazilian court accepted criminal charges against Temer presented by a federal public prosecutor in connection with the case. Temer is thought to have received as much as R$38 million ($12 million) in bribes from JBS.

Joesley and Wesley were arrested in September 2017 on separate insider trading charges relating to the plea agreement. Wesley was released in February 2018 and Joesley a month later. In November 2018 police arrested Joesley over bribes allegedly paid by the Batistas and JBS to ministers and other politicians to obtain changes to regulations about the export of animal carcasses and the use of a parasite medicine. A judge ordered his release three days later.

JBS’s dealings with the BNDES – Brazil’s public development bank – have also come under intense scrutiny. In March 2019, the country’s federal prosecutors accused Joesley Batista and several high-ranking politicians of facilitating a series of fraudulent loans to JBS from the public bank. The loans, earmarked for JBS’s international expansion and approved in contravention to the bank’s rules, caused a loss of R$1.8 billion ($470 million) to BNDES. Prosecutors are now demanding JBS pay R$3.7 billion ($970 million) in compensation.

Cattle ranching in Para state, Brazil. Image: Courtesy of A.C. Moares / Flickr

Opaque audits

Corruption and illegal deforestation charges may have mounted in recent years, but JBS’s own compliance documents would have you believe they are Brazil’s benevolent meat-packers.

Audits commissioned by JBS since 2013 as part of agreements with various state prosecutors aimed at improving supply chain transparency (the 2009 Meat TAC agreement with the Amazon state of Pará where all major meat producers must monitor suppliers and agree to stamp out illegalities is a notable example) suggest the firm is a shining example of compliance.

The two latest available audits, covering 2016 and 2017, indicate that over 99 percent of JBS’s cattle purchases comply with environmental and labour laws.

However, when the public prosecutor’s office in Pará commissioned its own audits of large meat producers, including JBS for 2016, a strikingly different picture emerged.

The audit, devised under the Meat TAC agreement and published in 2018, said JBS was one of the worst performing meatpackers in the state during 2016.

It showed that the firm had bought over 118 thousand heads of cattle – or 19 percent of its total purchases in Pará – presenting some form of irregularity, including purchases from farms which didn’t have the mandatory Rural Environmental Cadastre document needed to sell to slaughterhouses.  Minerva, one of JBS’s main competitors, showed 0.1 percent of irregularities. Most shockingly, 14 percent of the total cattle purchased by JBS in Pará that year were found to have come from illegally deforested areas.

Princes told Earthsight its Brazilian beef “must come from suppliers that undertake and publish annual independent audits” to guarantee no purchases are made from farms that have committed illegalities. How it can continue to rely on such audits in spite of the recent findings from Pará is unclear.

Princes also stated it continually reviews its relationships with all suppliers, including JBS, and that it does not source any products from the specific JBS sites that have been called into question by Earthsight’s investigation. However, a policy focused on simply excluding certain JBS slaughterhouses or suppliers rather than seriously assessing the company’s overall record is somewhat short-sighted.

The JBS corned beef Earthsight found on British supermarket shelves did come from the company’s slaughterhouses in the state of Sao Paulo. Though they are far from the Amazon and have yet to be directly implicated in forest scandals, these slaughterhouses are close to other Brazilian forest biomes where illegal deforestation for cattle-ranching is common. In the light of JBS’s appalling track record, to simply assume that these slaughterhouses are ‘clean’ because they have yet to be found otherwise looks like a convenient and wilful compromise that leaves consumers exposed to levels of risk they are unlikely to be comfortable with. It also ignores the corruption issues surrounding JBS, about which Princes, Sainsbury’s and Carrefour chose not to comment in their responses to Earthsight’s findings.

Sustainable sources?

In comments sent to Earthsight, Carrefour has said the company is committed to achieving zero deforestation in its supply chain by 2020 and that it is “reaching out to the manufacturers producing the items [mentioned here], in order to discuss with them their sourcing policy.” Carrefour also noted JBS’s annual audits of its supply chain, outlined above, as evidence of the firm’s good practice.

Again, these companies’ over-reliance on JBS’s commitments and audits seem misguided when confronted with the available evidence.

It is noticeable that in its reply to Earthsight, Carrefour alluded to JBS’s 2009 agreement with Greenpeace as part of the company’s sustainability commitments. Carrefour also stated that it is “closely following JBS in its implementation of [its commitments], in close dialogue with relevant NGOs and experts in Brazil.” This seems to indicate that Carrefour has failed to keep up with the latest news, including the fact that Greenpeace, who had been in discussions with JBS about its supplier monitoring and transparency, walked out of those talks in frustration more than two years ago.

Sainsbury’s has told Earthsight that it is “committed to ensuring our own-brand products will not contribute to global deforestation by 2020. We’ve already made significant progress and geographically restrict the sites we source from in Brazil.” Sainsbury’s did not explain why this ethical commitment does not apply to other brands it chooses to sell.

Meanwhile, deforestation in Brazil is increasing, with decade-high levels of forest loss documented in 2018 and further rises documented in early 2019.. Brazil slaughtered nearly 32 million heads of cattle in 2018, the highest level since 2014 and cattle ranching remains one of the most destructive activities for Brazil’s forests and a key driver of deforestation.

The case for European regulation

It is unclear whether the specific cans of JBS corned beef filling supermarket aisles in the UK and Europe contributed directly to the destruction of Brazil’s forest ecosystem, but in maintaining relations with a company so complicit in recent deforestation and malpractice, retailers are diminishing their own ethical and sustainable mantras.

It is evident that European retail giants who continue to sanction the sale of JBS corned beef products are in danger of deepening Brazil’s deforestation epidemic.

Even if European buyers could be 100 percent certain that their own purchases were not of suspect origin, they would still be helping support a company involved in suspect practices. Most of their customers would probably expect them to disassociate entirely from such a company.

What’s more, alternative lower-risk options are available, at little or no extra cost. M&S, for example, has introduced DNA sampling across its beef supply chain, allowing it to trace all its beef back to individual farms and animals. It also currently stocks only British-produced corned beef. Meanwhile, Princes also produce an identical product made in France, which sells in supermarkets for the exact same price; Sainsbury’s own-brand Brazilian corned beef comes from a JBS competitor in Brazil with a much better record and yet is cheaper, while Morrisons also stocks British corned beef products.

Yet the continued promotion of a company with such a chequered record of environmental and financial abuse by some remains. Earthsight’s analysis suggests that the JBS beef sold by the firms we have identified is just the tip of the iceberg. Comparison of individual shipment records and EU import data suggest that JBS in Brazil is supplying one fifth of Europe’s global beef imports.

A long history of examples such as this one have led campaigners and parliamentarians across Europe to conclude that the only way to prevent EU consumers from unwittingly contributing to overseas deforestation – including illegal deforestation – is through government regulation. An EU law already exists which requires importers of timber to ensure their wood is legally sourced, and there are growing calls for similar legislation to be enacted for other ‘forest risk commodities’ like beef.

Nicole Polsterer, Sustainable Consumption and Production Campaigner at Fern, the forest and rights NGO, said: “It is unacceptable that JBS – a company fined for illegal deforestation – can continue to place beef on the EU market. This is further proof that the forthcoming EU Communication on Stepping Up Action to Halt Deforestation must propose legislation to ensure EU companies and their suppliers do no environmental and social harm.”

The EU and the UK have recognised the need for action to reduce the impact of their consumption on tropical deforestation, but the latest indications are that the economic bloc is leaning towards a non-regulatory approach, entrusting companies to act voluntarily. This has elicited concern from NGOs.

In the meantime, we can only hope consumers will now think twice before buying potentially bad beef.

Earthsight contacted JBS about our findings but received no reply before publication. Lidl, Bolton Alimentari, Targeter (producer of the Exeter brand) and Morrisons were all approached for comment but Earthsight received no response at the time of publication.

Image on homepage shows cattle deforestation in Brazil. Courtesy of Greenpeace / Daniel Beltrá.