Running Head: THE BRAZILIAN MILK FRAUD SCANDAL

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The Brazilian Milk Fraud Scandal Involving the Italian Food Conglomerate Parmalat. A Brief Case Study on a Transnational Corporation In Your Home Country Gabriel Ferreira International Public Relations – PUR6608 class University of Florida

THE BRAZILIAN MILK FRAUD SCANDAL

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The Brazilian Dairy Market background. Over the last decade, the Brazilian dairy market has been one of the most fast growing dairy markets in the world. In the early 90s, the Brazilian agro-industrial milk sector suffered three very important changes: it starting being an open economic market for international competitors; at the time inflation was decreasing; and so milk prices drop significantly. All of these changes would not have been possible without the implementation of the Real Plan in 1994 (the new Brazilian coin plan until today) that strengthened investments in the country, especially in the milk-producing sector. These investments also lead to an increase in population number and to changes in alimentary habits (Nahmias, 2008). By becoming such a lucrative sector, the milk and dairy product sector in Brazil became the target for food adulteration processes. Its high-value role in feeding specific groups inside the population, such as children’s, women and elders, and regarding the expensive undergoing steps to achieve a final product that could be sold in the market, was some of the key aspects that attracted Brazilian dairy farms to adulterate its raw milk productions on the first place (De La Fuente & Juarez, 2005).

Parmalat’s Major Setback. In 2003, the world leading Italian food conglomerate Parmalat, was devastated by money deviation denunciations (approximately $20 billion), what was known as the biggest financial scandal of Europe, and asked for forced agreement (Sverige, 2004). The damage