BRASILIA (Reuters) – Brazilian antitrust regulator Cade on Thursday opened an investigation into meatpackers JBS SA and BRF SA, according to a decision signed by the agency’s superintendent.
The decision said the probe was launched based on an article in Brazilian newspaper Valor Economico that described executives of the two companies saying at an event in Sao Paulo on Wednesday that they would have to pass through a 30% rise in corn costs to chicken prices.
Reuters was present at the event and witnessed the remarks by JBS Chief Executive Gilberto Tomazoni and BRF’s CEO, Lorival Luz.
Tomazoni stated that corn prices have risen sharply in Brazil, due to strong demand for exports and ethanol. Corn represents the largest cost on chicken meat.
The companies said they had not been notified of the investigation. BRF said it acts ethically and in accordance with rules governing competition. JBS said it rejected any allegations of cartel practices.
Reporting by Ricardo Brito and Alberto Alergiri; Writing by Jake Spring; Editing by David Gregorio and Leslie Adler