Attacks by directors of the French multinationals Danone and Carrefour preaching a boycott of the main Brazilian agricultural export products, soy and meat, created a crisis in commercial relations between countries that usually celebrate together the ideals of equality, fraternity and freedom.
It became evident that what the French least want, at the moment, is equality for Brazilians in access to the European market. This was already clear in President Emmanuel Macron’s repeated statements. And it intensified with protests by farmers blocking roads in France, due to the chances of the trade pact being signed at the next meeting of Mercosur presidents, in Montevideo, on December 6th. What was not expected was that companies with strong operations and interests in Brazil would go public and openly preach a boycott of Latin American products.
First, it was Danone that attacked Brazilian soybeans at the end of October. The company’s global vice president, Juergen Esser, said in an interview with Reuters that it was due to sustainability issues. He provided no basis for the claim. After strong negative repercussions and a boycott movement by Brazilian consumers, Danone backed down. And he stated that the information released was “not accurate”.
Carrefour boycott ignored possible Brazilian response
In terms of relative importance, it is the Europeans who have the most to lose if they boycott Brazilian soy. It meets 59% of the demand for feeding poultry, cattle, pigs and fish on the old continent. In contrast, European purchases of bran represent only 14% of exports from Brazil’s soybean complex.
In the case of Danone, the French executive seems to have forgotten that third place in the Brazilian dairy market is also at stake. And revenue in South America of more than US$1 billion in the first half of the year alone.
The most recent bombshell was dropped by the CEO of Carrefour, Alexandre Bompard, who this week made his commitment via social media and also said he wanted to inspire other companies to do the same.
After Brazilian revolt, Carrefour tried to explain that the measure announced by the manager only applies to French stores. And that at no point “does it refer to the quality of the Mercosur product, but only to a demand from the French agricultural sector, currently in a context of crisis”. Carrefour is the largest supermarket chain in Brazilian retail, with 1200 stores and more than 150 thousand employees.
France practically no longer buys Brazilian meat
The worst part of Carrefour’s stance involves the reputation of Brazilian meat – which leads global exports – and not any concern about the presence of the product on the shelves of French supermarkets, which is already negligible.
From January to October, meat exports from Brazil to France corresponded to 0.002% of the total. This means less than 40 tons, a volume that practically fits in a single trailer. The European Union itself, which already accounted for half of Brazilian meat shipments in the 90s, is currently the destination for just 4.8% of containers.
The damage to Carrefour’s positioning, however, spread. If Carrefour, which has more than a thousand stores in Brazil, did not measure consequences to preach a boycott of Mercosur meat, there would be no reason for its French rival, Les Mousquetaires, which has no operations in the country, to be left behind. Also on social media, the group’s CEO, Thierry Cotillard, endorsed the boycott of South American meat.
Agro threatens to boycott and not supply meat to Carrefour in Brazil
The rise in temperature reached the point where the main entities in the Brazilian agricultural sector suggested the interruption of meat supplies to Carrefour, as a reprisal. “If it is not useful to supply Carrefour in France, it is not useful to supply Carrefour in any other country”, says one signed by the Brazilian Association of Meat Exporting Industries (ABIEC), Brazilian Animal Protein Association (ABPA), Brazilian Association of Agribusiness (ABAG), Brazilian Confederation of Agriculture and Livestock (CNA), Brazilian Rural Society (SRB) and Federation of Industries of the State of São Paulo (FIESP).
The demonstration by the Brazilian productive sector was promptly supported by the Minister of Agriculture, Carlos Fávaro. And in the same tone: “well, if it doesn’t serve French people, it won’t serve Brazilians. So, don’t supply meat to this brand’s market here in Brazil.”
Wanting to “play to the fans” and please French farmers, Danone and Carrefour put their own image, reputation and the million-dollar business they maintain in Brazil at risk. None of the companies sought to support their position by pointing out objective criteria for the supposed “unsustainability” of Brazilian soy and meat. On the contrary, in environmental terms, no other country matches the conservation adopted in Brazil, which maintains 66% of the territory covered with native forests and obliges rural producers to preserve, within their properties, from 20% to 80% of the areas.
Trade war “disguised as climate concern”
For FGV Economics and Law professor Daniel Vargas, the trade war disguised as climate concern “started sooner than anyone imagined”. “Climate and environment, which should be noble and common causes, are quickly becoming an open weapon in commerce and geopolitics. In the middle of the dispute, a game of narratives, supported more by prejudices than by data and rigorous science”, he argues.
Used to dictating fashion in the world, the French would now be wanting to “mark” Brazil as an outdated model, says Vargas, “even though our environmental virtues are immensely superior to theirs”.
For the researcher, a trade war, under the environmental banner, will be worse for France than for Brazil. “When French companies throw themselves into the trade war to pretend to be the ‘good guy’, they must remember that, on the other side, there are consumers and leaders who may also react.” He remembers that he is. “As the carriage moves forward, the measure becomes more necessary than ever”, he emphasizes.
French attack has no scientific or rational basis
“In commercial life, dialogue and pressure go hand in hand. It’s not just talk and friendship. It is also dispute and pressure. The French are not positioning themselves as good debaters. They are not presenting robust arguments. They do not base their decisions on scientific references or systematic data. They are shooting, as in a battle, to annihilate the opponent, without the right to react. Brazil cannot silently accept being labeled a villain. You must react, with vigor. It will take more than arguments”, he concludes.
What caused the most astonishment among Brazilian analysts was the careless, and even irresponsible, way in which French executives treated a country where their multinationals have million-dollar assets.
“France and its companies may not imagine the effect of the repudiation and the consequences that this declaration could cause to the French economy”, says Paulo Matos, livestock farmer and president of the South Mato Grosso Association of Nellore Breeders. He highlights that, if there is retaliation, the French could pay dearly, whether in the area of tourism, where the country is one of the main destinations for Brazilians, or in the import of wines, cheeses, perfumes and other French products.
Carrefour boycott would be to make fun of French farmers
For professor and coordinator of Insper Agro, Marcos Jank, the position of French multinationals is inexplicable and “borders on the ridiculous”.
“If Carrefour saw any health, technical or environmental problem, it would have to close the purchase of meat throughout South America. Why is it going to close in Paris and not in São Paulo or Buenos Aires, where there would theoretically be a problem? The truth is that there is no problem with this meat. It was just a political decision to make an average with French farmers, and it ends up damaging our image. Not because of volume, because 40 tons is nothing. But it’s just another unnecessary poke,” says Jank.
“Are giant companies, who know Brazil, who have been here for decades, now going to say that Brazil doesn’t know how to produce? It’s an absurd business. If it were a company that never came here, but it is a company that is based here. It’s one of the biggest, it knows the country, it buys Brazilian meat every day, why would it take such an attitude?”, he asks.
Carrefour responds in note
The report contacted Carrefour Brasil’s advisors to update the French chain’s position regarding the controversy created by its CEO. In response, we received the following note:
“Carrefour França informs that the measure announced on Wednesday, 20/11, only applies to stores in France. At no point does it refer to the quality of the Mercosur product, but only to a demand from the French agricultural sector, currently in a context of crisis.
“All other countries where the Carrefour Group operates, including Brazil and Argentina, continue to operate without any change and can continue to purchase meat from Mercosur. In other countries, where there is the franchise model, there are also no changes.“
