(Bloomberg) -- Meatpackers JBS SA and Minerva SA are resuming beef sales to Carrefour SA in Brazil after a spat that halted supplies to stores in the South American nation, according to people familiar with the matter.
The decision was taken after the French retailer issued a public apology to Brazil’s government and farmers, said the people, who asked not to be identified because the information is yet to be made public.
The move is the latest chapter in a spat triggered by last week’s pledge from Chief Executive Officer Alexandre Bompard that Carrefour would not sell any meat produced by the Mercosur bloc of South American nations at its French stores. A potential trade deal between the European Union and Mercosur threatened to overflow France with meat “not respecting its requirements and standards,” he said in a statement. The comment drew the ire of Brazilian officials and prompted companies to retaliate by suspending beef sales to the retailer’s unit in Brazil.
In his apology letter, the executive highlighted the “high quality” and “compliance to rules” of Brazilian meat, but fell short of reversing the commitment made last week. The company said it will continue to rely on local farmers for the bulk of the meat it markets in France, and that it applies the same rule in Brazil.
“Carrefour France’s decision is not intended to alter the rules of a French market that is already largely structured around local supply chains,” Bompard said.
Brazilian meat industry group Abiec, which represents companies including JBS, said it received the response with “satisfaction” and expected transactions with Carrefour to return to normal.
Shares of Atacadao SA — the unit that operates Carrefour stores in Brazil — jumped as much as 7.6% in Sao Paulo after JBS and Minerva’s decision to resume beef sales.
On Tuesday, Brazil’s lower house of Congress was expected to vote on a bill to enforce “economic reciprocity” in response to European protectionism. After Carrefour apologized, lawmakers decided to vote only on the urgency of the bill, while the discussion on the proposal itself is still set to go through a public hearing, Lower House Speaker Arthur Lira said.
The proposal establishes that Brazil won’t be part of any trade deal that can impact or set restrictions on its exports, when other countries or bloc signatories don’t adopt equivalent instruments in their legal framework.
Carrefour has more than 1,000 outlets in Brazil, which generate more than 20% of its global sales, according to data compiled by Bloomberg. Its Brazilian unit expects supplies will normalize in the coming days, it said in a separate statement on Tuesday.
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.”
--With assistance from Leda Alvim, Clarice Couto and Daniel Carvalho.
(This story was recast with meat producers’ decision to suspend boycott)
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