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UPDATE 4-Brazil officials defend beef after 'system-wide problem' prompts U.S. ban

U.S. ban@ (New throughout, adds details of complaints, response from Brazil Agriculture Ministry)

CHICAGO/BRASILIA, June 23 (Reuters) - Brazilian officials scrambled to shore up their beef industry's reputation on Friday after the United States blocked shipments of fresh cuts, saying it found abscesses in the meat and signs of systemic failures in the inspection program of the world's largest beef exporter.

The U.S. Department of Agriculture described repeated import violations involving raw beef from seven Brazilian facilities, indicating a "system-wide problem," according to a letter seen by Reuters on Friday.

The letter to Brazil's Agriculture Ministry, dated Thursday, laid out the reasons for the U.S. ban on fresh Brazilian beef imports. While fresh beef shipments to the United States represent only 1 percent Brazil's beef exports, the ban is one more black eye for the country's powerhouse protein industry, which has suffered a series of recent scandals.

Brazil Deputy Agriculture Minister Eumar Novacki said the problems laid out by the USDA posed no risk to public health. Novacki told reporters at a news conference that some cattle had adverse reactions to certain vaccines.

Among the violations the USDA detected were abscesses, unidentified foreign material and "ingesta," which can include any food, drink and medicine that cattle consume.

Brazilian beef exports to the United States from companies including Marfrig Global Foods SA and Minerva SA have also been missing shipping marks and had labeling problems on containers, according to USDA data.

Novacki recognized that there were flaws in Brazil's inspection system but suggested that there could be "commercial motivations" for the U.S. ban. He said U.S. and European authorities had stepped up inspections of Brazilian beef in recent months.

European and Canadian officials also described issues found in inspections of imported Brazilian beef.

The EU said it had rejected some shipments of Brazilian beef due to the presence of Shiga-toxin producing E. coli. Some Brazilian poultry shipments were refused because of salmonella.

Canada has rejected six shipments of Brazilian beef out of 191 meat shipments since April 10, according to the Canadian Food Inspection Agency.

The Canadian agency said it recently blocked imports from one JBS SA plant in Brazil that did not meet food safety requirements, but is accepting meat from plants that meet its standards.

Novacki said Brazil was working with European officials to allay their concerns and declined to comment on rejected shipments in Canada.

The issues, detailed by spokespeople in response to questions by Reuters, illustrate that Brazil meat industry is still under a cloud of scrutiny.

Three months ago, Brazilian meatpackers were hit with a scandal involving alleged bribery of health officials, which briefly shut Brazil's protein exports out of major global markets from China to Europe.

Shares of JBS, the world's largest meatpacker, and local rival Marfrig Global Foods SA both fell in Sao Paulo.

Marfrig said beef exports from Brazil to the U.S. market have contributed less than 1 percent of its revenue this year.

JBS declined to comment on the matter.

Rival Minerva SA, whose shares were flat, said it would ship fresh beef to the U.S. market from Uruguay rather than Brazil, adding that the change would not affect its export volumes. (Reporting by Tom Polansek in Chicago and Marcela Ayres in Brasilia; Additional reporting by Roberto Samora, Bruno Federowski and Thaís Freita in Sao Paulo, Rod Nickel in Winnipeg and Tom Polansek in Chicago; Writing by Brad Haynes; Editing by David Gregorio and Chizu Nomiyama)