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High standards could save small slaughterhouses

Given the market's concentration, José Vicente Ferraz, technical director at Informa Economics FNP, which is launching "Anualpec 2012", a livestock yearbook, says that the small and medium businesses with high standards will survive. “Being small does not mean being unprepared or illegal," he says.

Ferraz warns, however, that this is a process and that it is not going to happen overnight. Some units will continue to feel the negative effects of this concentration process, and will require government action to prevent an imbalance. "In the medium and long term, however, the scenario is optimistic," says Ferraz.

Ferraz believes smaller companies are better able to relate to livestock suppliers, being able to require specific standards of animals according to the demands of the market. The loyalty between small slaughterhouses and farmers could yield more profits for both. In addition, slaughterhouses could also offer differentiated services to restaurants, serving specific demands.

One of the advantages of such partnerships is that the price of beef should increase more than the price of other proteins from now on, producing better margins in the sector. It is a moment of transformation. The downside, however, is that the smaller companies have more difficulty adapting because of the difficulties they have in finding the resources to invest in new products. This is a difficulty the large companies do not have.

Information provided by Folha de S. Paulo

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