Carrefour Eases Brazil Tensions After CEO’s Meat Snub

By Dominique Vidalon and Gabriel Araujo

PARIS/SAO PAULO (Reuters) -Carrefour apologised on Tuesday after its CEO Alexandre Bompard’s criticism of South American meat last week angered Brazilian companies and caused suppliers to cut beef deliveries to the food retailer’s Brazilian subsidiary.

The Brazilian unit, which operates Carrefour, Atacadao and Sam’s Club stores, said beef deliveries had not “occurred as scheduled” since last Thursday, causing temporary shortages of some cuts.

“The delivery schedule of beef products has resumed and the company expects the normalisation of resupply of such products during the coming days,” the unit of the French supermarket said in a securities filing.

Bompard said last week that the trade deal being discussed between the European Union and South America’s Mercosur trade bloc presented the “risk of meat production spilling over into the French market (and) failing to meet its requirements and standards”.

His remarks, made in a letter to leaders of France’s farm lobbies and posted on social media, were blasted by Brazilian agribusiness groups as “protectionist.

On Tuesday, Carrefour headquarters said it regretted that the remarks had been “perceived as a questioning of our partnership with Brazilian agriculture or as criticism of it”.

“We never set French agriculture against Brazilian agriculture, as our two beloved countries share a deep love for the land, its cultivation and quality food,” it added.

Sao Paulo-traded shares of Carrefour Brasil rose as much as 5.5% following the statement, before paring some gains. Brazil’s benchmark stock index Bovespa rose 0.5%.

Abiec, a beef lobby representing large processors including JBS, Marfrig and Minerva welcomed the apology.

In a statement, Abiec said it hoped “operations of the French retailer could be resumed,” in a sign that meat companies would resume meat supplies to Carrefour’s stores in Brazil.

“Based on the positive stock reaction, it seems that the market may be pricing a fast resolution,” Citi analysts said in a note to clients.

They noted that although beef usually represents only a small percentage of sales, the broader protein category was more important and helped to drive customer traffic, explaining “the urgency to normalize the supply as fast as possible.”

Brazil’s agriculture ministry also said it had received a letter from Bompard apologising for his remarks.

Carrefour said it sources meat sold in France almost exclusively from France and meat sold in Brazil exclusively from Brazil, adding it would continue to do so.

Bompard’s remarks came amid protests by French farmers against a potential EU free trade agreement with the Mercosur bloc formed by Brazil, Argentina, Uruguay and Paraguay.

(Reporting by Dominique Vidalon in Paris and Gabriel Araujo in Sao Paulo; Additional reporting and writing by Helen Reid and Ana Mano; Editing by Benoit Van Overstraeten, Mark Potter, Louise Heavens and Jonathan Oatis)