- Brazilian meat giant JBS has canceled its plans to reorganize after a shareholder that is a bank's investment arm vetoed it, Meatingplace reported.
- The company did not identify alternative options before its decision, which could impact the company's plans to enter international markets in a new and different way.
- Representatives of BNDESPar, the shareholder that vetoed the reorganization's plan, did not comment to news media on why it was voted down. The bank's current executive board was not in place when JBS first announced the proposed reorganization changes earlier this year; membership changed after former Brazilian President Dilma Rousseff was impeached.
Without an explanation for the veto vote, it is unknown whether this deal — which had potential to shake up the global meat industry — was motivated by the industry or tricky national politics. Brazil has had a tumultuous year, with Rousseff's impeachment in August. Brazilian President Michel Temer is trying to restore fiscal discipline in government, which may be part of the reason this large international deal was nixed.
JBS remains a leading global meat processor, but this shows even it could be having challenges weathering the current climate of the meat industry. Growth is still key, but evolution may be even more necessary to stay relevant with today's consumers.
Transparency and meat label claims are a major issue here, as consumer demand for antibiotic-free and similar meat varieties continues to increase. This also means transparency surrounding operations and animal welfare, which JBS found out firsthand after a tour with journalists, NPR reported in July 2015.
The meat industry is also struggling against the rise of plant proteins. These stand to challenge animal proteins' dominance as consumers seek out more protein in their food and beverage products.
According to Meatingplace, BNDESPar's veto authority expires in 2019, so this deal may not be dead. However, there is sufficient time to work through both politics and industry challenges before then.