Blog: Nestle drawn into horsemeat scandal
Katy Askew | 19 February 2013
Ah, how the mighty have fallen.
Was it really only last week that Nestle CEO Paul Bulcke insisted he was "confident" that "what we produce is not affected" by the horsemeat scandal that has rocked the European food industry since January?
"Quality has a price so that is why we are sometimes more expensive," he said during a conference call to discuss the group's earnings. Nestle, Bulcke argued, "prides" itself on the use of local ingredients and invests heavily in ensuring the security of its supply chain.
Fast-forward four days, and Nestle's horse is not looking so high.
It has emerged that two of Nestle's prepared ready meals, sold in Spain and Italy, as well as a meat product produced for its catering arm, have tested positive for horse DNA.
The group's response has been swift and decisive: Nestle has replaced the ready meals on sale with alternatives that are 100% horsemeat-free; ended its contract with German meat supplier HJ Schypke; and suspended deliveries of all finished products that include meat from this source - even products that have tested horsemeat free.
Nestle's response has been nothing less than one would expect from the well-oiled machine that is the world's largest food maker. However, the fact that Nestle has been hit by the scandal once again emphasises that the highly integrated and complex nature of the supply chain means anyone could potentially be drawn in to the scare. If a containment enters the chain, it can spread like wildfire.
There has been a rise in the number of food companies in the UK filing for insolvency - and the intensification of competition between the country's grocers has been blamed....
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