Brazilian beef firm gains toehold in EU with Moy Park purchase

JBS director Jerry O’Callaghan a critic of IFA policy of protectionism

Jerry O’Callaghan: “Brazil has been dealt a really bad hand of cards in terms of how it has been perceived globally.” Photograph: Rui Nagae

Jerry O’Callaghan: “Brazil has been dealt a really bad hand of cards in terms of how it has been perceived globally.” Photograph: Rui Nagae

 

To the Irish Farmers’ Association, Jerry O’Callaghan might as well be one of the four horsemen of the Apocalypse.

This third son of a small farm west of Schull in Co Cork is today a director of Brazilian company JBS, the vanguard of the global juggernaut that is the South American beef industry.

In recent years the IFA has been at the forefront of efforts by Europe’s farmers to shut the continent’s markets to the likes of JBS.

It warns that any trade agreement between the EU and the South American trade bloc Mercosur that liberalises trade in agricultural products – principally South American beef – would cripple the sector.

The IFA’s version of Armageddon even comes with a price tag: it has calculated any deal would see farming losses in the EU top €32 billion.

Now after a global buying spree in the US, Canada and Australia that transformed JBS into the world’s largest meatpacker, the company has landed in fortress Europe, planting its flag in Ireland with this week’s €1.32 billion purchase of Craigavon-based poultry producer Moy Park, the North’s biggest private employer.

Foot in the door

“Moy Park supplies the 10 largest retailers in the UK so it has a very strong relationship with the sector. Our view is that these good customer relationships with retailers and the food service sector is an opportunity for us to sell more product into Europe,” says O’Callaghan, who serves as JBS’s director of investor relations.

But Moy Park was not acquired merely to act as a Trojan Horse. The Cork man sounds enamoured with his company’s newest buy.

“The way we see it Moy Park is a well-run business. We like the management. CEO Janet McCollum is with the company more than 20 years and she has a very good reputation within the company and in the market. We like the product portfolio a lot. It is a very creative company in terms of what they produce,” he says.

Future European acquisitions could lead to some rationalisation of operations but for now O’Callaghan says organic growth at Moy Park is the objective. “There is no intention to start cutting business at all. We are thinking of spending rather than cutting. You don’t change something that is working well. We’ll just add on some ideas, bring in some scale, reduce some costs.”

He cites JBS’s global scale when negotiating purchases of feed for chickens as an area where Moy Park could benefit and says other efficiencies will be sought by benchmarking Moy Park’s operations with JBS’s poultry businesses in North and South America.

One thing that will not change with this first European acquisition is O’Callaghan’s opposition to EU protectionism, especially when it targets Brazilian beef. European farmers are terrified by the scale and low cost base of Brazil’s farms and have campaigned vigorously against any trade deal that gives them more access to European consumers.

O’Callaghan describes the IFA-led campaign to portray his adopted country’s farmers as hillbillies whose labour, environmental and sanitary regimes make its produce unfit for European consumers as “underhand”, wryly describing the organisation as “great propagandists”.

Global view

Brazil

He insists the issues raised by the IFA among others which have resulted in a series of informal barriers to Brazilian beef imports are unjustified by the facts. He backs a campaign to take the EU to the World Trade Organisation over the issue.

As well as Brazil’s stigmatised farmers he argues the victims of the IFA’s campaign are European consumers, who he sees as hostages of the continent’s farming lobby: “The prices of prime cuts in Europe are disproportionately expensive in relation to per capita income or compared to the US . . . Is that fair? I don’t think it is. I think the European consumer is getting a raw deal.”

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