Introduction

JBS S.A. is a Brazilian food processing company, whose parent company is J&F Investmentos SA, a private investment holding company.

Measured by revenue, JBS S.A. is the largest meat processing company in the world. It is the largest global producer of beef, chicken, and lamb, and third in pork. By total annual sales, JBS S.A. is the second largest food company in the world, after Nestlé.

JBS was founded in 1953 by rancher Jose Batista Sobrinho to slaughter and process cattle. In 2007, JBS S.A. acquired Swift & Company, then the third-largest U.S. beef and pork processor; Swift was renamed JBS USA Holdings LLC (JBA USA). However, JBS S.A. retained worldwide rights to use the Swift brand. In 2008, JBS S.A. acquired Smithfield Foods’ beef business, renaming it JBS Packerland. In 2009, JBS S.A., via JBS USA, acquired a majority stake in Pilgrim’s Pride, giving JBS USA a significant stake in the chicken production industry. Also in 2009, JBS S.A. acquired Brazilian firm Grupo Bertin, making JBS S.A. the largest beef producer in the world.

JBS S.A. became a publicly-traded company in 2007, and is traded on the BM&F Bovespa stock exchange in São Paulo. Profits in 2016 were $217.2 million (U.S. dollars) on revenue of $53.5 billion. Current revenue for JBS USA is estimated at $31 billion (U.S.).

In December 2016, JBS S.A. announced a planned re-organization, with the goal of launching shares of its subsidiary JBS Foods International in the U.S. This IPO has been expected in 2017. However, in May 2017, scandals surrounding the company (see below) led to a huge drop in JBS S.A.’s share price, delaying and perhaps completely derailing the planned IPO of JBS Foods International.
 
Issues

Over the years, JBS USA has had issues ranging from cross contamination and food poisoning to transportation violations. For example, E coli contamination led to a beef recall from Arizona, California, Colorado, Florida, Illinois, Michigan, Minnesota, Nebraska, Oregon, South Carolina, Tennessee, Texas, Utah, and Wisconsin (1). Many lawsuits were filed, all of which settled (2).

Worker safety has also been a significant issue. For example, in 2010, JBS Swift was cited by the federal Occupational Safety and Health Administration for crushed fingers and hands, amputations, and blindness because of improper machine guards (3).

In 2014 alone, four workers died in JBS plants in North America, as noted in a 2015 profile of the company by KUNC in Colorado. Ralph Horner was trapped in a machine and crushed to death at JBS Swift’s Greeley packing plant (4). Another man died from burns sustained at JBS’s plant in Alberta, Canada.

Mercy for Animals Investigation, 2011

From April to June of 2011, Mercy For Animals shot undercover footage at Iowa Select Farms, a pork producer that is part of JBS Swift. The videos show female pigs being crammed into gestation cages where they can’t turn around. Workers are shown ripping out the testicles of piglets who had not been given pain killers, as well as cutting the tails off of piglets. Workers are also shown throwing piglets across the room. At the time, Iowa Select Farms supplied Costco, Kroger, and Safeway. Following the release of the investigation, Safeway claimed to have stopped purchases from JBS Swift. Kroger asked for an investigation and told JBS Swift to stop supplies from Iowa Select Farms.

“Iowa Select Farms Undercover Video: Mercy For Animals Footage Shows Inside One Of Nation’s Largest Pork Producers (GRAPHIC)” Huffington Post.

Pilgrim’s

JBS currently owns around 75% of Pilgrim’s (originally Pilgrim’s Pride) Pilgrim’s is a supplier for KFC, Walmart, Publix, Wendy’s, Chick-fil-A, Burger King, Costco, Kroger, and Sam’s Club. Pilgrim’s is traded on NASDAQ as PPC.

Pilgrim’s has had various problems over the years, ranging from food poisoning to immigration issues. For example, Listeria contamination killed seven people, caused three miscarriages, and made dozens more sick. This led to the largest ever food recall in the U.S. to date (5). In 2014, Bobby Beal died from electrocution at a Pilgrim’s plant in Texas. At a different plant in Texas, Pablo Romero was crushed to death. (6)

West Virginia Undercover Investigation, 2004

PETA released a video showing Pilgrim’s Pride employees throwing, kicking, jumping on, and slamming chickens against walls at a slaughterhouse that supplies KFC. The Pilgrim’s Pride plant had previously won KFC’s “Supplier of the Year” award.

The video as released was titled “KFC’s House of Horror.” Eleven employees were fired, but no criminal charges were filed (7). The special prosecutor in the case complained about “harassment” from PETA (8). “PETA video shows chicken abuse at KFC supplier,” USA Today.

North Carolina Undercover Investigation, 2014

A Compassion Over Killing investigator went undercover at Prince Poultry, which produced exclusively for Pilgrim’s. Prince’s facilities at the time consisted of 12 warehouses, each housing tens of thousands of birds. The subsequent video shows birds so deformed they were unable to walk. Workers throw sick and injured birds around. Still-living birds are stuffed into buckets with corpses, while others are buried alive in outdoor pits. Following an investigation, Pilgrim’s terminated its contract with Prince Poultry.

“Chicken abuse uncovered at North Carolina farm,” HLN (Headline News).

West Virginia Whistleblowers, 2016

Two contract farmers working for Pilgrim’s Pride came to Compassion in World Farming USA to expose what the company was hiding. After being provided hidden cameras, the farmers shot video documenting dead and slowly dying birds, many suffering from gangrene. As quoted: “It’s almost like the bird is eaten from the inside out, like it’s rotten from the inside out … alive.” Leg deformities were common, and birds were often unable to move because their legs couldn’t support the weight. Daily mortality rates in each house were so high it required multiple buckets to remove the corpses.

Helen Hedrick, another farmer, relates how when they went in one of the sheds, there was “bloody poop lying all over the floor.” She adds, “Consumers do not know anything about their food or they would be disgusted and they wouldn’t eat chicken at all, because I’m not sure I’m going to eat it anymore.” This expose led to Nicholas Kristof’s widely-cited editorial, “Animal Cruelty of the Price of Dinner?” which appeared in the New York Times Sunday Review, April 16, 2016.

“Disease-ravaged corpses, birds so genetically modified they can’t stand up and bloody feces everywhere: Undercover footage shows the squalid conditions inside one of America’s biggest chicken farms,” The Daily Mail.

Conclusion

Despite being the world’s second largest food company and the largest meat producer, JBS mostly flies under the radar outside of Brazil. (One profile is titled, “Inside The World’s Largest Food Company You’ve Probably Never Heard Of.”) In part, this stems from the fact that they are based in Brazil (where, as documented, they are very widely known. Compared to companies like Tyson and the much smaller Hormel, JBS doesn’t have a “brand name” that they use on products from their supply chain.

The exception to this is Pilgrim’s (formerly Pilgrim’s Pride), formerly an American-owned company with a recognizable brand. This is a significant reason why there are more investigations and stories about Pilgrim’s.

Another reason there are more investigations of Pilgrim’s than the rest of JBS Swift is that, compared to the lives of steers, chickens are intensively raised in much more brutal conditions. Grazing cattle – and even those on feedlots – don’t suffer the inherent agony of deformities or manipulated genetics of modern chickens. Birds are also small and defenseless, subject to the whims of either indifferent or outright cruel workers on factory farms.

 

May 2017