By Dominique Patton
BEIJING (Reuters) – Some of China’s largest food suppliers have pulled Brazilian beef and poultry from their shelves in the first concrete sign that a deepening scandal over Brazil’s meat processing industry is hitting business in its top export market.
The moves by Sun Art Retail Group <6808.HK>, China’s biggest hypermarket chain, and the Chinese arms of global retail giants Wal-Mart Stores Inc <WMT.N> and Metro AG <MEOG.DE> come days after China temporarily suspended Brazilian meat imports.
Safety fears over Brazilian meat have grown since police accused inspectors in the world’s biggest exporter of beef and poultry of taking bribes to allow sales of rotten and salmonella-tainted meats.
A spokeswoman for Sun Art Retail, which operates 400 Chinese hypermarkets, said on Wednesday the chain had removed beef supplied by top Brazilian exporters BRF SA <BRFS3.SA> and JBS SA <JBSS3.SA> from its shelves from Monday. Brazilian beef accounts for less than 10 percent of Sun Art’s beef supply, she said.
Wal-Mart has also removed Brazilian meat products from its stores, a person familiar with the matter said. He declined to be quoted because of the sensitivity of the matter.
Germany’s Metro has withdrawn Brazilian chicken legs and wings from its Chinese stores, said a manager, who declined to be named as he was not allowed to speak to media. The retailer, with 84 stores in China, does not sell Brazilian beef.
JD.com<JD.O>, one of China’s biggest online retailers, said in an emailed statement it had also removed all listings for imported Brazilian meat and is reviewing orders in process.
While Brazilian officials sought late on Tuesday to reassure consumers that the investigation had revealed only isolated incidents of sanitary problems, the reaction by Chinese retailers suggests that the probe could have far-reaching repercussions for the world’s top meat exporter.
Chinese consumers appeared largely unconcerned or unaware of the scandal in Brazil, with few people commenting on the issue on the country’s vibrant social media networks.
But the country has been hit by its own safety scandals in the past, making retailers sensitive to any potential risks.
“We removed the product already on March 20,” said Sun Art’s spokeswoman, noting it was ahead of the Chinese government’s first official comment on the issue.
Brazil is the top supplier of beef to China, accounting for about 31 percent of its imports in the first half of last year. Much of it is used in canteens and foodservice and branded Brazilian beef is less prominent in supermarkets than Australian beef.
Importers are expected to wait a few more days before seeking out alternative supplies, which will likely be more costly than Brazil’s.
“It’s a 45-day lead-time to get any product here. What if they lift the ban by the end of the week?” said an industry source who declined to be identified.
Hong Kong, the second-biggest buyer of Brazilian meat last year, has also issued a ban on imports, following similar steps by Japan, Canada, Mexico and Switzerland.
Major Hong Kong supermarket chain PARKnSHOP said it had removed Brazilian pork, beef and chicken from shelves.
“To cater for the needs of customers, we will increase the supply of meat and poultry products from other countries,” it said in a statement, without elaborating.
(This story was refiled to remove extraneous words from headline)
For a graphic on Brazil meat scandal, click http://fingfx.thomsonreuters.com/gfx/rngs/BRAZIL-CORRUPTION-FOOD/010040820J5/BRAZIL-MEAT.jpg
(Reporting by Beijing Newsroom and Dominique Patton; Editing by Kenneth Maxwell and Susan Thomas)