Carrefour and Mercosur Meat: A Trade Drama Between France and Brazil

Carrefour's decision to stop selling Mercosur meat in France is causing political turmoil in Brazil. While the Brazilian federal government is alarmed and seeking a response to French protectionism, Lower House Speaker Arthur Lira is ready for battle. This week, the Brazilian lower house plans to vote on a new law aiming at 'economic reciprocity.' The goal is to ensure that Brazil does not enter into trade agreements that restrict its exports unless the contracting partners have similar provisions in their legislation. Arthur Lira sharply criticized Carrefour CEO Alexandre Bompard, urging him to reconsider his decision. Bompard had stated that he would forgo selling Mercosur meat in solidarity with French farmers. These farmers are opposing a planned EU free trade agreement with Mercosur, which would allow South American meat suppliers to gain larger market shares in France. In Brazil, Bompard's move faces opposition. Agriculture Minister Carlos Favaro supports the decision of Brazilian beef producers to suspend sales to Carrefour's Brazilian unit. He emphasized that Brazilian products are of high quality and rejected 'falsehoods' about Brazilian goods. Among the companies that have stopped sales to Carrefour are JBS, the world's largest meat producer, and Minerva. While Carrefour's Brazilian subsidiary has announced that the boycott could affect its customers, the stock market in São Paulo sent mixed signals. Atacadao, which manages Carrefour's operations in Brazil, saw losses of 5.5% before recovering, while JBS fell by 4% and Minerva by 1.1%.