February 24, 2022

Marfig ends talks with IDB for US$200 million sustainability loan

Major Brazilian meatpacker Marfig Global Foods SA has ended talks with the Inter-American Development Bank (IDB) over a US$200 million loan tied to environmental targets, Reuters reported.

The failed proposal underlines Brazil's beef sector's uphill fight to overcome criticisms that it contributes to the Amazon rainforest deforestation due to its opaque and poorly regulated network of suppliers.

IDB said it conducted due diligence on Marfig's "Verde+" programme designed to improve its beef supply chain sustainability in Brazil.

It said both parties were unable to come to a mutual agreement following its internal review process.

Marfig said the suspension of talks between both parties was because of a disagreement on the proposed financial conditions.

Major meatpackers in Brazil such as Marfig have stricter direct supplier vetting to ensure compliance with environmental laws, but it is difficult to track "indirect suppliers" that supply cattle to ranchers on illegally deforested land.

-      Reuters