BRF shares plunge 19% as former CEO is arrested in food safety probe

Brazilian meat company BRF has seen its shares drop 19% on Monday following the arrest of the company’s former CEO Pedro de Andrade Faria, as Brazilian police stepped up its investigation into food safety in the Brazilian meat industry.

Brazilian federal police allege that officials at BRF were aware that levels of salmonella in some of the company’s meat products exceeded regulatory limits, and collaborated with officials at Brazil’s Agriculture Ministry to conceal this.

The Brazilian authorities began their investigation into food safety corruption last year, and during the initial investigation phase BRF officials were accused of paying inspectors and politicians to overlook potentially contaminated or rotten meat which was due for export.

The so-called ‘carne fraca’ scandal led to at least 35 countries banning or reducing exports of Brazilian meat, and gravely affected BRF and other meat producers in the country.

Pedro de Andrade Faria served as the company’s CEO between 2015 and 2017, and he has been arrested on charges that he was aware that the company had committed fraud when trying to mislead food safety officials.

Brazilian authorities also announced they had taken BRF’s former vice-president of global operations Hélio dos Santos Júnior into custody, following his resignation from the role last week.

The Brazilian federal police stated: “The investigators identified that the frauds were done with the knowledge of executives of the group as well as its technical experts and professionals responsible for quality within the company.

“The fraud had the intention to cheat inspection services so as to prevent the Agriculture Ministry from controlling the quality of the industrial process of the company under investigation.”

BRF said it will co-operate with investigators during the probe, claiming: “The company follows Brazilian and international norms and regulations in reference to the production and sale of its products, and for more than 80 years BRF has demonstrated its commitment to quality and food safety.”