What Next for Brazil's Meat Sector?
After two years of breakneck growth and consolidation funded largely by the government, Brazilian meatpackers are protein providers to the world. Can they also become global brands?
by John Rumsey
Two years ago the Brazilian meatpacking industry was a
There were far too many small competitors fighting for market
share. That led to dumping on the home market: cut price filet
mignon predictably led to a chain reaction.
Retail prices for other beef cuts were culled, followed by
those for pork and then chicken, notes Gustavo Wigman, food
analyst at Goldman Sachs in São Paulo. That was coupled
with a tight market for cattle, which compressed margins in the
sector, he notes.
The industry was ripe for consolidation. Indeed, since the
start of 2009, 10 meatpackers have sought judicial protection
from creditors. They include Independência, at the time
the fourth largest meatpacker in terms of capacity, with 800
million reais of gross sales per year. Bertin, the
number three at the time, was absorbed by JBS, adds Wigman.
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