Cyberattack on JBS, acquisition has Aussies concerned

Between the recent cyberattack and a pending acquisition of a major pork producer, JBS is undoubtedly on the minds of people in Australia more than it ordinarily would be.

Roy Graber Headshot
(Vince Varga | Freeimages.com)
(Vince Varga | Freeimages.com)

Between the recent cyberattack and a pending acquisition of a major pork producer, JBS is undoubtedly on the minds of people in Australia more than it ordinarily would be.

The Brazil-based food company has operations in multiple protein sectors, and in multiple continents. In Australia, its business has been primarily focused on beef and lamb, but a recent deal was reached for it to acquire one of Australia’s largest pork producers, Rivalea.

A couple of weeks ago, I wrote about U.S. Sen. Jon Tester’s concerns that the meat industry becoming too consolidated and how incidents like the cyberattack could put the U.S. food system in peril. Now, those concerns are spreading in Australia.

Since the cybersecurity attack involved the information technology systems for JBS USA, which also oversees JBS operations in Australia, both countries’ protein supplies were compromised. This resulted in the idling of some plants, including six plants in Australia.

Not long after JBS confirmed the cyberattack, it announced its plans to acquire Rivalea, as well as Oxdale Dairy Enterprise. The deal has not cleared all regulatory hurdles, but more often than not, these proposed acquisitions are finalized in just a matter of weeks.

So assuming the JBS-Rivalea transaction closes, that will increase JBS’ presence in the Australian animal protein sector. And Tester’s concerns for the United States are being duplicated in Australia. Matthew Warren, professor of cybersecurity at the Royal Melbourne Institute of Technology, told the Epoch Times that if Rivalea, which processes about 26% of all Australian pork, becomes part of JBS, Australia’s largest producer of beef, JBS could again be the target of hackers.

“It means that a single point of attack would be more attractive for cyber attackers as they would know that one attack would have a greater chance of success; it also increases the likelihood of ransomware attacks,” Warren said.

“All supply chains are potentially vulnerable to cyberattacks, including ransomware. Supply chains are defined as being critical infrastructure, and if they are attacked, the system disruption would have a big impact on society, for example, meat shortages across Australia.”

Clearly, that would not be a good thing for Australia. Animal protein supplies were already negatively impacted in 2020 with the COVID-19 pandemic. In fact, the Victorian government ordered last August that meat and poultry plants enact a 33% reduction in the workforce. And COVID-19 is still a concern, as was evidenced during the recent vaccination clinic at a Hazeldene’s chicken processing plant in Lockwood.

Will these considerations be taken into account when the appropriate antitrust regulators approve the merger? Should they be? I’d love to learn what your thoughts on the matter are.

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