EXCLUSIVE: CAGE: Horsemeat saga will shrink supply chains - Kerry CEO

Kerry Group chief executive Stan McCarthy has predicted there will be fewer companies involved in the supply of meat as the industry responds to the recent horsemeat contamination saga.

McCarthy said there would "ultimately be greater visibility [and] greater traceability" along the supply chain as food producers review how they source meat.

"There will be a lot less steps between the abattoir and the plate, for want of a better term. You will see an elimination of brokers and distributors," McCarthy told the Consumer Analyst Group of Europe conference in London yesterday (19 March).

With the long and often complex supply chains involved in the food industry under scrutiny, retailers caught up in the contamination are reviewing how they source products. Tesco has already pledged to source more meat from the UK in the wake of the contamination.

McCarthy forecast the industry would emphasise the "provenance" of their products as they sought to reassure consumers.

However, McCarthy told investors and analysts at the CAGE conference there could be some short-term "volatility" in supply as the UK meat processors slowly build capacity to meet increased demand. "In some cases in some proteins you have deficiency in the UK market, so it's going to take time to respond to that," he said.

Kerry, which supplies chilled and frozen own-label ready meals to retailers in the UK, had tested all of its products and all lines were clear of contamination, McCarthy said.

However, the Kerry chief said the company had been hit by a fall in consumer demand for frozen ready meals at the height of the saga. Nevertheless, he indicated sales were recovering.

"Certainly we've seen the impact," McCarthy said, while pointing that frozen ready meals were "less than 1.5% of or so of the Kerry Group". He added: We have seen those volumes back. It seems to be getting a little bit better."

McCarthy also said sales volumes of non-beef products "particularly on the chilled side" have been "quite strong".

"What you do see in the non-meat sectors, particularly in the chilled side, volumes have been quite strong in that area."