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U.S. says ransomware attack on meatpacker JBS likely from Russia

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Brazil’s JBS SA told the U.S. government that a ransomware attack on the company that has disrupted meat production in North America and Australia originated from a criminal organization likely based in Russia, the White House said on Tuesday.

JBS is the world’s largest meatpacker and the cyberattack caused its Australian operations to shut down on Monday and has stopped livestock slaughter at its plants in several U.S. states.

The attack follows one last month by a group with ties to Russia on Colonial Pipeline, the largest fuel pipeline in the United States, that crippled fuel delivery for several days in the U.S. Southeast.

White House spokeswoman Karine Jean-Pierre said the United States has contacted Russia’s government about the matter and that the FBI is investigating.

“The White House has offered assistance to JBS and our team at the Department of Agriculture have spoken to their leadership several times in the last day,” Jean-Pierre said.

“JBS notified the administration that the ransom demand came from a criminal organization likely based in Russia. The White House is engaging directly with the Russian government on this matter and delivering the message that responsible states do not harbor ransomware criminals,” Jean-Pierre added.

JBS sells beef and pork under the Swift brand, with retailers like Costco Wholesale Corp carrying its pork loins and tenderloins. JBS also owns most of chicken processor Pilgrim’s Pride Co, which sells organic chicken under the Just Bare brand.

If the outages continue, American consumers could see higher meat prices during summer grilling season and meat exports could be disrupted at a time of strong demand from China.

The disruption has already had an impact, industry analysts said. U.S. meatpackers slaughtered 94,000 cattle on Tuesday, down 22% from a week earlier and 18% from a year earlier, according to estimates from the U.S. Department of Agriculture. Pork processors slaughtered 390,000 hogs, down 20% from a week ago and 7% from a year ago.

Prices for choice cuts of U.S. beef shipped to wholesale buyers in large boxes jumped $3.59 to $334.56 per hundred pounds, the USDA said. Prices for select cuts climbed $5.55 to $306.45 per hundred pounds.

The USDA, Department of Homeland Security and other agencies are closely monitoring the meat and poultry supply, a White House official said. The agencies are also working with agricultural processors to ensure products move efficiently and that no price manipulation occurs as a result of the cyberattack, the official said.

AFFECTED SYSTEMS SUSPENDED

JBS said it suspended all affected systems and notified authorities. It said its backup servers were not affected. A company representative in Sao Paulo said there was no impact on Brazilian operations.

The company said Sunday’s cyberattack affected its North American and Australian IT systems and “resolution of the incident will take time, which may delay certain transactions with customers and suppliers.”

JBS, with North American operations headquartered in Greeley, Colorado, controls about 20% of the slaughtering capacity for U.S. cattle and hogs, according to industry estimates.

“The supply chains, logistics, and transportation that keep our society moving are especially vulnerable to ransomware, where attacks on choke points can have outsized effects and encourage hasty payments,” said threat researcher John Hultquist with security company FireEye.

U.S. beef and pork prices are already rising as China increases imports, animal feed costs rise and slaughterhouses face a dearth of workers. Any further impact on consumers will depend on how long production is down, market analysts said.

“If it goes on a week or longer, you’ve got a major problem,” said Dennis Smith, broker for Archer Financial Services in Chicago.

Two kill and fabrication shifts were canceled at JBS’s beef plant in Greeley after the cyberattack, representatives of the United Food and Commercial Workers International Union Local 7 said in an email. JBS Beef in Cactus, Texas, also said on Facebook it would not run on Tuesday.

The UFCW urged JBS to ensure workers receive their contractually guaranteed pay during the shutdowns.

JBS Canada said in a Facebook post that shifts had been canceled at its plant in Brooks, Alberta, on Monday and one shift so far had been canceled on Tuesday.

The United States Cattlemen’s Association, a beef industry group, said on Twitter that it had reports of JBS redirecting livestock haulers who arrived at plants with animals ready for slaughter.

Last year, cattle and hogs backed up on U.S. farms and some animals were euthanized when meat plants were shut during coronavirus outbreaks among workers.

A JBS beef plant in Grand Island, Nebraska, said only workers in maintenance and shipping were scheduled to work on Tuesday.

Over the past few years, ransomware has evolved from one of many cybersecurity threats to a pressing national security issue. A number of gangs, many of them Russian-speakers, develop the software that encrypts files and then demand payment in cryptocurrency for keys that allow the owners to decipher and use them again.

(Reporting by Caroline Stauffer, Tom Polansek, Mark Weinraub in Chicago; Additional reporting by Jeff Mason aboard Air Force One and Trevor Hunnicutt in Washington, Ana Mano in Sao Paulo and Joe Menn in San FranciscoEditing by Nick Zieminski and Grant McCool)

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Britain in talks with 6 firms about building gigafactories for EV batteries

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Britain is in talks with six companies about building gigafactories to produce batteries for electric vehicles (EV), the Financial Times reported on Wednesday, citing people briefed on the discussions.

Car makers Ford Motor Co and Nissan Motor Co Ltd, conglomerates LG Corp and Samsung, and start-ups Britishvolt and InoBat Auto are in talks with the British government or local authorities about locations for potential factories and financial support, the report added .

 

(Reporting by Kanishka Singh in Bengaluru; Editing by Himani Sarkar)

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EBay to sell South Korean unit for about $3.6 billion to Shinsegae, Naver

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EBay will sell its South Korean business to retailer Shinsegae Group and e-commerce firm Naver for about 4 trillion won ($3.6 billion), local newspapers reported on Wednesday.

EBay Korea is the country’s third-largest e-commerce firm with market share of about 12.8% in 2020, according to Euromonitor. It operates the platforms Gmarket, Auction and G9.

Shinsegae, Naver and eBay Korea declined to comment.

Lotte Shopping had also been in the running, the Korea Economic Daily and other newspapers said, citing unnamed investment banking sources.

South Korea represents the world’s fourth largest e-commerce market. Driven by the coronavirus pandemic, e-commerce has soared to account for 35.8% of the retail market in 2020 compared with 28.6% in 2019, according to Euromonitor data.

Shinsegae and Naver formed a retail and e-commerce partnership in March by taking stakes worth 250 billion won in each other’s affiliates.

($1 = 1,117.7000 won)

 

(Reporting by Joyce Lee; Editing by Edwina Gibbs)

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Canada launches long-awaited auction of 5G spectrum

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Canada is set to begin a hotly anticipated auction of the mobile telecommunications bandwidth necessary for 5G rollout, one that was delayed more than a year by the pandemic.

The 3,500 MHz is a spectrum companies need to provide 5G, which requires more bandwidth to expand internet capabilities.The auction, initially scheduled for June 2020, is expected to take several weeks with Canadian government selling off 1,504 licenses in 172 service areas.

Smaller operators are going into the auction complaining that recent regulatory rulings have further tilted the scales in the favour of the country’s three biggest telecoms companies – BCE, Telus and Rogers Communications Inc – which together control around 90% of the market as a share of revenue.

Canadian mobile and internet consumers, meanwhile, have complained for years that their bills are among the world’s steepest. Prime Minister Justin Trudeau’s Liberal government has threatened to take action if the providers did not cut bills by 25%.

The last auction of the 600 MHz spectrum raised C$3.5 billion ($2.87 billion) for the government.

The companies have defended themselves, saying the prices they charge are falling.

Some 23 bidders including regional players such as Cogeco and Quebec’s Videotron are participating in the process. Shaw Communications did not apply to participate due to a $16 billion takeover bid from Rogers. Lawmakers and analysts have warned that market concentration will intensify if that acquisition proceeds.

In May, after Canada‘s telecoms regulator issued a ruling largely in favour of the big three on pricing for smaller companies’ access to broadband networks, internet service provider TekSavvy Inc withdrew from the auction, citing the decision.

Some experts say the government has been trying to level the playing field with its decision to set aside a proportion of spectrum in certain areas for smaller companies.

Gregory Taylor, a spectrum expert and associate professor at the University of Calgary, said he was pleased the government was auctioning off smaller geographic areas of coverage.

In previous auctions where the license covered whole provinces, “small providers could not participate because they could not hope to cover the range that was required in the license,” Taylor said.

Smaller geographic areas mean they have a better chance of fulfilling the requirements for the license, such as providing service to 90% of the population within five years of the issuance date.

The auction has no scheduled end date, although the federal ministry in charge of the spectrum auction has said winners would be announced within five days of bidding completion.

($1 = 1.2181 Canadian dollars)

 

(Reporting by Moira Warburton in Vancouver; Editing by David Gregorio)

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