JBS won't move into New Zealand beef processing sector

By Jenny Eagle contact

- Last updated on GMT

Will JBS move into New Zeland market?
Will JBS move into New Zeland market?

Related tags: Meat

JBS beef and pork processor has denied reports it will enter the ‘fragmented’ New Zealand beef processing sector.

According to Federated Farmers in New Zealand, the country’s meat processing industry is under threat because its processing is overcapacity and ‘plagues the industry’.

It claims a large proportion of its meat is being sold using b2b branding rather than consumer branding which limits the way it can attract a premium price for a product.

Overseas buyer

'If producers were to communicate with processing companies and commit supply, so that processing companies had a reasonable indication of the volumes and timing of livestock, this could help shift the focus of the processing company,’ it said in the report.

However, it warned if one of its major processing companies went into liquidation an overseas buyer could come in and take a significant foothold in the NZ red meat industry.

JBS have successfully entered the US and Australian markets and become big players. What is stopping them from doing the same in NZ​?” the report says.

They could bring with them the economies of scale and efficiencies, as well as the institutional knowledge and customers they have developed from their role as the world’s largest meat company and their operations in Brazil, the US, and Australia​.

At least one of our major NZ meat processor/exporters has a strategy very closely aligned to the one JBS is currently rolling out in Australia​.”

No plans as yet

However, Alexandre Inacio, corporative communication manager, JBS Brazil denied the reports and told FoodProductionDaily JBS has beef operations in Australia, EUA, Brasil, Paraguay, Argentina, Uruguay, Canada.

For now we don’t have any plans for New Zealand or any country where we don’t have an operation​,” he said.

JBS will be exhibiting at Gulfood in Dubai next month, February 23-27, at Dubai World Trade Center.

The company recently completed its acquisition of Seara Brasil, a poultry producer owned by Marfrig Alimentos.

The acquisition includes processed foods, poultry and pork processing plants, along with 21 distribution centers, according to JBS. The purchase would see JBS overtake Springdale, Arkansas-based Tyson Foods as the top poultry producer globally.

Tradable Processing Rights

According to Federated Farmers the structure and behavior of participants in the NZ beef industry has allowed for competition at multiple levels of the supply chain and a lack of investment along the whole value chain.

To alleviate the problem it suggested setting up Tradable Processing Rights (TPR), initially proposed in 1985 to the Meat Industry Council, which would see tradable rights allocated based on the processors current market share, using a similar process to that used by the Meat Board to allocate the EU quota.

Once an allocation is completed this would act as a quota for the volume of meat a company can process in a season.

Another alternative is a merger between two processing cooperatives in the country such as Silver Fern Foods and Alliance Group.


A merger would create one farmer owned cooperative with 52.7% of the sheep meat and 39% of the beef market share​,” it stated.

This could help to reduce farm gate competition for lambs, rationalize capacity and create a united front for international exporting and marketing​.

If a merger were to succeed and grow to the point that the cooperative controlled close to 80% of the meat industry, as is the case in the Dairy industry, then legislation would likely play an important role​.

The Commerce Act 1986 would be relevant, as gathering that level of market share would result in reduced competition​.”

Related topics: Processing & Packaging

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