Tesco back at centre of horsemeat scandal following a further recall

Tesco back at centre of horsemeat scandal following a further recall

A fresh horsemeat recall initiated by Tesco could come as a "body blow" for the UK retailer, City analysts have warned.

Tesco was one of the first retailers to become caught up in the horsemeat scandal sweeping Europe, when its frozen beef burgers were found to contain horse DNA in early February. Since then, the group has detected horsemeat in four own brand products - including a recall of own label frozen meatloaf that was announced late yesterday (13 May).

"That Tesco has moved openly and promptly reflects well on management," Shore Capital analyst Clive Black wrote in a note. "However, it may be a body blow that perpetuates the perception in the market that Tesco is more of a victim than not of 'horse gate'."

Black emphasised that Tesco is not the only UK retailer to issue recalls over mislabelled meat products. Asda, Iceland, Aldi and Lidl have all initiated recalls after horsemeat was detected in products. Meanwhile, Sainsbury's found unlabelled pork in products and even Morrisons, which operates a more vertically integrated supply chain, recalled continental meats as a "precautionary measure".

Nevertheless, Black concluded: "It is Tesco as market leader that is perhaps gaining the highest profile from an unedifying series of events. Steps have and continue to be taken to try and reduce the scope for further such news flow but last night's announcement represents a modicum of disappointment to our minds."

Tesco stepped up its testing for horsemeat after horse DNA was first detected and the group has since insisted that it is increasing its commitment to take complexity out of the chain and source more meat in the UK.