COMMENT: Horse meat raises supply chain concerns
Some serious questions over the reliability of the supply chain were raised last week, when Irish food safety authorities detected the presence of undeclared horse and pig meat in burgers and ready meals.
The products, sold in the UK and Ireland through major supermarkets including Tesco, Aldi, Lidl and Iceland, did not represent a threat to health. Nevertheless, the presence of horse and pig meat where horse and pig meat should not be sent shock waves through the industry.
Unlike much of continental Europe, eating horse is not culturally acceptable in the UK or Ireland. Meanwhile, the presence of pork in "beef" ready meals would be abhorrent to Jewish or Muslim consumers. Shoppers were not best pleased.
Cue a frenzy of media outrage and retailer apologies (including a full page advert taken out by Tesco in the weekend papers).
While Tesco was the only "big four" UK retailer to have its burgers tested positive for horse meat, Sainsbury's and Asda both pulled product from the shelves, as it had originated with the same supplier. With its vertically integrated supply chain and commitment to British meat, Morrisons was the only major supermarket not caught up in the scandal (although we understand it is checking its burgers to be on the safe side).
The move must come as a blow to the retailers involved. Tesco, in particular, has invested significantly in convincing consumers of the quality of its own label range. The horse meat scandal is certainly a knock back on this front.
However, its implications are also much more far-reaching. The affair does somewhat beg the question: can we trust that a product is what it claims to be? We are well used to scandals involving bogus products or shoddy ingredients in markets like China. But here, in so-called developed markets like the UK and Ireland?
In the trade, suppliers often tell us that if you can meet the exacting standards of a UK retailer, you can supply anyone. Indeed, supplying a UK retailer is taken as a mark of quality by international buyers. But, as this scandal highlights, just how much do UK retailers know about where their product originates?
The net is purportedly closing in on the supplier of the tainted beef, which is believed to have come from the Netherlands or Spain. But this does not really address the structural issue of how such product was allowed to enter the food chain.
The reason, of course, is the pressure to keep costs down. A producer will buy raw meat from the cheapest source, which will then be processed into cheap frozen beefburgers, which will then be sold at entry price points by supermarkets.
Tesco's Everyday Value beefburgers cost at GBP1 a box; Asda and Iceland value burgers are likewise GBP1 and Aldi and Lidl - who were also implicated in the scandal - sell burgers at GBP1.39 for a box of eight. If food is being sold so very cheaply, then it stands to reason that cuts are being made somewhere to keep production costs down.
Indeed, cuts are likely being made at every point down the supply chain - from the use of factory farming methods onwards.
As an aside, it is also worth noting that "value" burgers are only legally required to contain 47% meat. The rest can be made up of various ingredients, including parts of the carcass that are mechanically stripped. A similar situation exists in the US, hence last year's "pink slime" fiasco.
To improve traceability would require investment. To invest, the end price would undoubtedly need to rise. But, in these tough economic times, there are many consumers that want, and indeed rely on, low priced food.
Can we have it both ways? It is likely that, moving forward, the challenge for UK retailers and their suppliers will be to convince us that we can.
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Sainsbury's initial campaigns promoted brands, own label products, and buying basic ingredients. As the credit crunch continued, Sainsbury's launched Live Well for Less. Tesco emphasized price in 2008...
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