New CRR Report: GPA’s (Casino Group) Beef Supply Chain Exposed to Deforestation Risks
Casino Group is a French multi-banner food retailer, with a controlling share in Grupo Pão de Açúcar (GPA) in Brazil. This report analyses GPA’s deforestation risk exposure based on beef samples collected through store visits. Chain Reaction Research (CRR) visited 50 GPA supermarkets in five Brazilian cities and inspected 500 randomly selected beef products. Data from the product labels establishes supply chain links between supermarkets and slaughterhouses located in the Legal Amazon.
- In 2017, GPA was the second largest retail company in Brazil with a 13.7 percent market share. GPA’s procurement and distribution centers have high stock capacities and allow for high volume purchases from distant sources.
- GPA may be exposed to deforestation and other sustainability risks within its beef supply chain. GPA’s Beef Purchase Policy does not state a specific timeline and has not been updated since March 2016, despite the company having announced a review by January 2018. The most recent progress report was published in July 2017.
- Thirty percent of the 500 sampled beef products originated from 23 slaughterhouses in the Legal Amazon. Of these 152 products, 30 originated from five high-risk slaughterhouses, all of which are owned by JBS and Marfrig Global Foods.
- GPA and Casino Group may both be exposed to reputational risks resulting from peer comparison studies. Twenty-five of the sampled beef products are linked to very high and high-risk JBS plants, compared to 16 for Cencosud and 7 for Carrefour.
- Reputational impacts may result in a GPA market capitalization loss of between 7 and 18 percent. This translates to a market capitalization loss of between 3 and 7 percent for Casino Group and between 18 and 46 percent for Rallye, Casino Group’s majority owner. Its bondholders and loan providers include HSBC, Santander, Deutsche Bank, UBS and BNP Paribas, which have deforestation-related cattle policies.
Click here to read the full report or to download the PDF-version.
For more information, please contact Tim Steinweg.