Unlikely allies want to keep a Brazilian beef giant off US stock markets

A giant Brazilian meatpacking company is facing continued opposition to its plans to list on the New York Stock Exchange over concerns about corruption schemes, allegations of deforestation in the Amazon and its growing market share in the United States.

The proposed list by JBS, the world's largest 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 U.S. 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 making plans an IPO in the United States, but calls for this from major investors vote on the proposal have postponed the move.

A listing on the New York Stock Exchange would give JBS greater access to capital.

“They've been able to take dollars from their own government and our government and continue to grow their market share, and they're doing it like a bad actor,” said Lia Biondo, executive vice president of the United States Cattlemen's Association.

This month, a bipartisan group of U.S. senators wrote a letter to the Securities and Exchange Commission urging the agency to reject the stock 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 spokesperson said. That's what 15 senators said in their letter on January 11.

The letter urged regulators to “consider how JBS's improper access to U.S. capital markets could strengthen its market position, increase its ability to engage in anticompetitive behavior and could have a negative impact have on American farmers and ranchers.”

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

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

Although meat production in general has a major impact on the environment, including in the United States, research suggests that JBS has a bigger impact than most companies because it has the largest number of slaughterhouses that buy cattle from the Amazon rainforest.

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

The company, with US operations based in Colorado, is controlled by two Brazilian brothers, Joesley and Wesley Batista. Over the past two decades, it has become a global leader in U.S. beef production, as well as in the pork and chicken sectors. It is now among a handful of major meatpackers in a U.S. industry that has undergone significant consolidation in recent years.

JBS and its holding company have reached a number of settlements in connection with 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 in JBS factories.

The company has also been accused of links to deforestation in the Amazon, a crucial 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 linked to the beef industry.

Global meat consumption is expected to grow by 14 percent by 2030 as the world's population grows and incomes generally rise, according to the UN's Food and Agriculture Organization has called for a more plant-based diet to help reduce CO2 emissions.

This month, Secretary of Agriculture Tom Vilsack wrote in a letter to Senator Elizabeth Warren, who had inquired about JBS's government contracts, that “excluding any company 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 the agency has created new programs to make it easier for smaller producers to sell to the department, which oversees agriculture and also administers several social welfare programs, including free school lunches.

In 2014, Brazilian prosecutors exposed a widespread corruption scheme involving JBS, one of the country's largest employers with more than 150,000 employees, and other major companies. J&F Investimentos, the Brazilian holding company that is JBS's controlling shareholder, ultimately agreed to pay $3.2 billion in reparations and fines related to the corruption case. The holding company acknowledged bribing government officials to sign off on investments so it could expand its operations internationally.

In a 2020 plea deal, J&F pleaded guilty to related charges filed 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, J&F in Brazil announced that it would challenge the fine it had previously paid in court. Last month, Supreme Court Judge José Antonio Dias Toffoli temporarily suspended the payment.

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