Unlikely Allies Want to Bar JBS, the Brazilian Beef Giant, From U.S. Stock Markets

Unlikely Allies Want to Bar JBS, the Brazilian Beef Giant, From U.S. Stock Markets - The New York Times

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Unlikely Allies Want to Bar a Brazilian Beef Giant From U.S. Stock Markets

Environmentalists and American meat producers alike are asking regulators to keep JBS, the world’s biggest meatpacker, off the New York Stock Exchange.

Manuela Andreoni and

Manuela Andreoni reported from Rio de Janeiro and Dionne Searcey from New York City.

A giant Brazilian meatpacking company is facing persistent opposition to its plans for a listing on the New York Stock Exchange because of concerns about corruption settlements, accusations of Amazon deforestation and its growing market share in the United States.

The proposed listing by JBS, the world’s biggest meatpacker, has brought together American beef producers, environmentalists and politicians from both major parties in a rare common cause.

JBS is a leader in the American meat industry and has millions of dollars in government contracts to supply meat for food banks and school lunches. The company announced last year that it was planning an initial public offering in the United States, but calls from major investors to vote on the proposal have delayed the move.

A listing on the New York exchange would give JBS broader access to capital.

“They’ve been able to take dollars from their own government and our government and keep building up their market share, and they’re doing this as a bad actor,” said Lia Biondo, executive vice president of the United States Cattlemen’s Association.

This month, a bipartisan group of United States senators wrote to the Securities and Exchange Commission and urged the agency to reject the share listing. “Dozens of journalistic and NGO reports have shown that JBS is linked to more destruction of forests and other ecosystems than any other company in Brazil,” the 15 senators said in their letter on Jan. 11.

The letter urged regulators “to consider how JBS’s improper access to U.S. capital markets might strengthen its market position, enhance its ability to engage in anticompetitive conduct, and adversely impact U.S. farmers and ranchers.”

Also this month, a dozen British lawmakers urged the Securities and Exchange Commission to reject the share listing to “send a clear message that the United States stands firm in its commitment to combating climate change.”

A spokeswoman for the Securities and Exchange Commission declined to comment for this article.

While meat production has a big environmental impact in general, including in the United States, research suggests that JBS has greater impact than most companies because it has the biggest number of slaughterhouses that buy cattle from the Amazon rainforest.

In a statement, the company said a listing in New York would “further enhance scrutiny of JBS’s robust governance” and that the company “takes its responsibility to produce in a more sustainable manner seriously.” It added that JBS had excluded thousands of suppliers because of irregularities.

The company, with U.S. operations based in Colorado, is controlled by two Brazilian brothers, Joesley and Wesley Batista. Over the past two decades, it has expanded globally to become not only a leader in U.S. beef production but also in pork and chicken. It is now among a handful of big meatpackers in a U.S. industry that has experienced significant consolidation in recent years.

JBS and its holding company have agreed to a number of settlements linked to bribery and price-fixing. And, last year, the U.S. Department of Labor asked a federal court to issue a nationwide restraining order against a subcontractor amid concerns about child labor violations at JBS plants.

The company has also been accused of links to deforestation in the Amazon, a critical defense against climate change because its trees and soil store billions of tons of planet-warming carbon. Just last month, a Brazilian state sued JBS for millions in damages and fines, accusing it of buying cattle raised in an illegally deforested reserve.

Research suggests about 80 percent of deforestation in the Amazon is connected to the beef industry.

Global meat consumption is expected to grow 14 percent by 2030 as the world’s population grows and incomes generally rise, according to the U.N. Food and Agriculture Organization, which has called for eating a more plant-based diet to help reduce carbon emissions.

This month, Agriculture Secretary Tom Vilsack wrote in a letter to Senator Elizabeth Warren, who had inquired about JBS’s government contracts, that “removing a firm from procurement would likely impact our ability to secure affordable food,” a “situation that highlights the urgency of efforts to promote a more equitable and diverse food system.”

Mr. Vilsack said that the agency was putting into place new programs to make it easier for smaller producers to sell to the department, which oversees farming and also administers several social welfare programs, including free school lunches.

In 2014 Brazilian prosecutors exposed a sprawling corruption scheme that implicated JBS, one of the country’s largest employers with more than 150,000 workers, as well as other major companies. J&F Investimentos, the Brazilian holding company that is the controlling shareholder of JBS, eventually agreed to pay $3.2 billion in reparations and fines in connection with the corruption case. The holding company acknowledged bribing public officials to sign off on investments so it could expand its business internationally.

In a 2020 plea agreement, J&F pleaded guilty to related charges brought by the U.S. Department of Justice. Since then, the holding company says, it has developed a robust anti-corruption program for JBS, a requirement of the plea deal.

Recently in Brazil, J&F announced that it would question the fine it had previously agreed to pay in court. Last month, a Supreme Court Justice, José Antonio Dias Toffoli, temporarily suspended payment.

In a statement to The Times, J&F said that its fine payment had been suspended while the company evaluated new evidence that would show “illegality” in the investigation and settlement agreement.

Manuela Andreoni is a Times climate and environmental reporter and a writer for the Climate Forward newsletter. More about Manuela Andreoni

Dionne Searcey is a Times reporter who writes about how the choices made by people and corporations affect the future of the planet. More about Dionne Searcey

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