Bribes at your BBQ: How Australia’s biggest meat company was founded on corruption

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You may not know the name JBS.

But if you buy Primo ham, Huon salmon, McDonald’s burgers or meat at Coles, Woolworths or Aldi, you’re probably eating JBS products.

It’s the biggest meat company in the world, the biggest in Australia, and it’s eating up our food industry more and more.

Four Corners can reveal that behind the food giant’s early expansion into Australia were bribes paid in Brazil and two billionaire brothers willing to break the law to get what they want.

Here’s what you need to know about the company behind your next barbecue.

JBS supplies beef, lamb, pork and now salmon to major supermarkets.(Getty Images: Theo Clark)

Rapid expansion

The family empire began in 1953 as a small butcher shop in the Brazil region, overseen by businessman Jose Batista Sobrinho.

When his sons Joesley and Wesley took over, the business expanded to Brazil, throughout South America and North America.

A $1.4 billion ($1.9 billion) takeover of US beef processor Swift made JBS a major player internationally in 2007.

A composite image of two men, Wesley Batista and Joesley Batista.
Brothers Wesley (left) and Joesley Batista (right) are each worth billions of dollars.(Reuters: Paulo Whitaker, Adriano Machado)

That same deal gave JBS control of Australian Meat Holdings, the country’s largest beef processor, which was owned by Swift.

JBS’s plans for Australia didn’t stop there.

The following year, JBS paid $150 million for Tasman Group, which owned slaughterhouses in Tasmania and Victoria, as well as a feedlot in New South Wales.

Suddenly JBS had sites along the east coast of Australia, raising eyebrows among some local growers and breeders.

Where did all the money come from?

JBS had the financial backing of the Brazilian government – ​​which Wesley Batista had insisted at the time on a “normal financial structure”.

In fact, Four Corners confirmed that its first two takeovers in Australia were fueled by corruption and bribery in Brazil.

Extremely well-connected Joesley Batista had orchestrated the company’s wave of global acquisitions, buying up competitors while expanding its supply chain.

A truck with the name 'JBS Carriers' on it drives down a road in a regional area.
JBS’s early expansion into Australia and the United States was only made possible by the corruption of Brazilian politicians.(ABC: Four Corners/Ryan Sheridan)

But he blew up a corruption scandal in Brazil in 2017, testifying against high profile connections he had bribed.

Joesley, Wesley and some of their top executives described a massive scheme involving payments to more than 1,800 politicians.

In exchange for the Batista brothers’ immunity, JBS’s parent company agreed to pay a $3.2 billion fine.

Joesley confessed to paying bribes to Brazil’s finance minister on the understanding that the minister would persuade a state bank to finance the JBS companies.

This funding helped pay for the acquisition involving Australian Meat Holdings.

The following year, another round of funding backed by kickbacks was used for the takeover of Tasman Group.

A prosecutor asked Joesley if JBS would have been able to get funding had it not been for the kickbacks to the finance minister.

“No, no,” he replied. “There would have been no agreements.”

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Brazil’s butchers: the corporate colossus eating up Australia’s food industry

From scandal to scandal

Since the corruption scandal, JBS’s headaches have only continued.

Both Wesley and Joesley spent time in jail in 2018, charged with insider trading after selling stocks and speculating in the currency before their plea deal.

In the United States, JBS’s parent company paid $256 million to settle a foreign bribery case, while the company also paid hundreds of millions more in fines and settlements for money-fixing rackets. price.

JBS has pledged to help save the Amazon rainforest, but has faced repeated accusations of sourcing cattle from illegally deforested land in Brazil.

He was fined $8 million for deforestation in 2017.

A still from a corporate video showing the treetops, the words
While pledging to protect the Amazon, JBS has been accused of sourcing cattle from illegally deforested land.(Source: JBS promotional video)

Despite promises to crack down on the problem, investigations by Bloomberg and Reporter Brasil say the problem persists.

Several supermarket chains in Britain have discontinued products using JBS beef in Brazil.

Coles stocks canned beef imported from JBS in Brazil on its shelves in Australia, but declined to say whether it had concerns about illegal deforestation in its supply chain.

In a statement, JBS Brazil said it was one of the first companies to invest in policies and technologies to combat and eliminate deforestation in the Amazon and that it “remains firmly committed to this cause”.

JBS also made headlines during its long battle with the Australian Taxation Office (ATO) after a 2019 audit identified “various tax risks” within the company.

But the company has resisted giving the ATO thousands of pages of correspondence with its tax advisers, PwC, saying the documents are covered by legal privilege.

JBS gets green light to expand into Australia

None of this has dampened JBS’s ambitions in Australia, where it is now branching out into a whole new industry: fish farming.

Last year, the company bought Australia’s second-largest farmed salmon producer, Huon Aquaculture, for $425 million.

An aerial photo of a ship alongside a circular salmon pen in a bay in Tasmania.
The Huon deal sees JBS enter a whole new industry.(ABC: Four Corners/Ryan Sheridan)

The offer prompted a fierce backlash from environmentalists such as former Greens leader Bob Brown and author Richard Flanagan.

Billionaire and Huon shareholder Andrew Forrest even paid for a series of national newspaper ads opposing a takeover.

These voices were countered by Peter Gutwein, then Prime Minister of Tasmania, and Jono Duniam, Federal Assistant Minister for Fisheries, who both publicly praised JBS’s salmon plans.

The purchase of Huon and – with the aim of expanding even further into the pork industry – major pork processor Rivalea in 2021, were major tests for JBS.

He hadn’t bought an Australian company since his bribery scandal.

Both deals had to be approved by Treasurer Josh Frydenberg and assessed by his advisers at the Foreign Investment Review Board (FIRB), which considers the national interest and character of investors.

JBS Australia CEO Brent Eastwood told ABC radio in September that the company had a good relationship with the FIRB.

Unlike former treasurer Joe Hockey, who was happy to hail Primo’s takeover by JBS in 2015, Mr. Frydenberg has been more discreet.

He made no public statement when approving the latest offers and declined to answer questions from Four Corners.

JBS Australia declined an interview and did not respond to written questions.

In a statement, it described itself as a “proud corporate Australian citizen with a strong brand and reputation”.

While the Batista brothers – whose value Forbes estimates at around $5 billion each – no longer sit on JBS’s board of directors or hold executive positions, they retain huge stakes in the company.

A Batista will continue to oversee the company’s expansion into Australia – Wesley’s son, Wesley Junior, is now the global president for Oceania.

Bruno Brandão, of Transparency International Brazil, warns that changing the behavior of a company like JBS is a difficult task.

“[It] needs a lot of pressure from authorities, consumers, investors to really make sure that this type of company, which goes through systemic corruption, really transforms its practices.”

Watch Four Corners’ full investigation into the practices of JBS and its massive expansion on ABC iview.

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