November 30, 2005

Five Brazilian meat packers under investigation

Five of Brazil's largest meat processing plants are under investigation for market manipulation, a prosecutor at the attorney general's office in Mato Grosso state told Dow Jones Newswires. Executives from the five firms will meet with congressional leaders and cattle ranchers on Wednesday to address the investigation.

State attorneys from Mato Grosso--one of Brazil's largest cattle-producing states-- have recorded conversations between Friboi Group, Bertin, Mataboi, Frigoara and Independencia, the attorney general's office said.

In one, Jose Batista Jr, owner of the privately held Friboi Group, said that, "as soon as the domestic prices start to rise, we'll throw a world of meat into the market," the Estado de Sao Paulo newspaper reported Tuesday.

Mato Grosso state attorney Mario Lucio Avelar told Dow Jones Newswires that the investigation has been going on for 20 days.

"An executive from a competing firm told us about it," Avelar said. The executive brought the news to the attorney general's office and federal police investigators because he suspected price fixing in the market.

Avelar said the five companies were being investigated for financial crimes and fraud.

Friboi Group and Bertin are two of the largest meat processing companies in Latin America. Friboi, Bertin and Mataboi denounced the price fixing accusations in Estado de Sao Paulo, while Independecia did not comment. Bertin and Friboi--both large exporting firms--did not return telephone calls made by Dow Jones Newswires.

Brazil is the world's no. 1 beef exporter.