(Bloomberg) -- Carrefour SA has issued a public apology to Brazil to settle a crisis with its government and farmers, after having said the company would not sell South American meat in France.
“Our statement last Wednesday regarding the free trade agreement with Mercosur has caused disagreements in Brazil that it is our responsibility to ease,” the company said in a statement on Tuesday. “We never set French agriculture against Brazilian agriculture.”
Last week, Chief Executive Officer Alexandre Bompard said the French retailer was committed to not marketing any meat produced by Mercosur, a South America trading bloc, drawing ire from Brazilian officials and companies. Brazilian beef giants such as JBS SA, the world’s largest producer, and Minerva SA decided to retaliate and suspended sales to Carrefour in Brazil.
The French grocer has more than 1,000 outlets in Brazil, which generate more than 20% of its global sales, according to data compiled by Bloomberg. Carrefour Brazil expects supplies will normalize in the coming days, it said in a separate statement on Tuesday.
After the apology, shares in Atacadão — Carrefour’s Brazilian branch — jumped as much as 5.5% at the market open in Sao Paulo, before trimming some of its earlier gains. The stock is up 3.9%, trading for 6.97 reais. Atacadão said in a separate statement it’s facing meat shortages in some stores, adding there has been no significant impact on sales so far, given the current levels of inventories.
Carrefour’s statements come amid protests by French farmers against a potential European Union free trade agreement with Mercosur, formed by Brazil, Argentina, Uruguay and Paraguay.
Brazilian officials were vocal against Bompard’s decision and publicly defended the quality of the country’s meat. The French embassy in Brazil has acted as an intermediary to help Carrefour retract its statement and solve the spat, Brazilian Agriculture Minister Carlos Favaro said in an interview with TV Globo on Monday.
“We understand the standards adhered to by Brazilian meat, its high quality, and its flavor,” the Carrefour statement said. “We regret that our communication has been perceived as a questioning of our partnership with Brazilian agriculture or as criticism of it.”
“We source almost all our French meat exclusively in France, and we will continue to do so. Carrefour France’s decision is not intended to alter the rules of a French market that is already largely structured around local supply chains,” the company said.
Following Carrefour’s statement, the group representing Brazil beef exporters, known as Abiec, freed up its members to resume supplies. Meatpacker Masterboi said it will resume deliveries on Tuesday. JBS and Minerva did not immediately respond to a request for comment.
On Tuesday, Brazil’s lower house of Congress is expected to vote on a bill to enforce “economic reciprocity” in response to European protectionism.
“We are monitoring the situation, but it seems the market may be pricing in a fast resolution,” João Pedro Soares, an analyst at Citigroup Inc., said in a Tuesday morning report.
--With assistance from Leda Alvim and Clarice Couto.
(Updates with shares and meat group comments from fifth paragraph)
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