Lessons From Europe’s Horsemeat Scandal
We must realize that every failure harms demand and consumer confidence.
by Troy Marshall in My View From The Country
Jan. 17, 2013
The scandal was in Europe. It erupted after tests conducted in Ireland found that 37% of randomly tested beef from a major supplier contained horsemeat, and up to 85% had minute traces of pork. It’s a scandal that is even more surprising in that it occurred in Great Britain.
Consider this: After the sensational BSE outbreak a couple of decades back, the result was the destruction of thousands of animals, as well as the implementation of individual animal ID and very strict tracking protocols designed to preclude something like this from ever happening again. It appears, however, that while the internal systems were both robust and dynamic, the controls on imported products were insufficient.
Consumers generally believe that the food products they buy are safe and that the labels and the products actually match up. Of course, we can argue that some of those assumptions are naïve and that every product must be handled properly to ensure safety, and that zero tolerance on some issues is impractical. Yet, we also must realize that every failure harms demand and consumer confidence.
The breakdown in England got me to thinking about the situation here at home. Is there a potential in the U.S. for such a situation? USDA’s final rule on animal disease traceability was just recently published and set to become effective in March. The arrival at this point has been a tortuous path. With animal ID and traceback, some felt it was essential to safeguard the industry, consumers and our markets and wanted 48-hour traceback capabilities. Meanwhile, others thought it was an infringement on trade, and too expensive and cumbersome to commerce to implement.
Both sides were probably right and the compromise solution was heralded as a victory by most people. Ironically, while costs and additional paperwork were greatly reduced over the original plan, there will still be additional costs. The additional costs would have been acceptable, except that the traceback capability was so greatly reduced that it will be totally ineffective for what it was designed to do. So, politically we got a system; unfortunately, the system won’t accomplish anything, and we are still going to have more costs.
Perhaps it can be argued that we’re better off with the new animal disease traceability rule than not doing anything. But if we have a health scare, or a disease outbreak, the industry will suffer and consumers will draw their own conclusions about the job we did.
I’m a complete believer in free enterprise and market-based solutions. I believe that government intrusion in the marketplace is almost always counterproductive, and I would never support it on marketing issues of any form. However, when it comes to food safety, the sad reality is that government has a vital role...
UK’s Tesco struggles to survive ‘horse meat’ scandal
By Carina Kamel - Al Arabiya News
Friday, 18 January 2013
Britain biggest retailer Tesco launched a media campaign in an attempt to contain the damage from revelations some of its products contained horse meat.
Taking out full page ads in a number of British newspapers, Tesco apologized to its customers after horse meat was found in some of its frozen beef burgers saying it had withdrawn all products from the supplier in question. The company said it would find out how horse meat ended up in its burgers and promised affected customers a full refund.
Tesco’s products are sold all over the UK at its own stores and also in parts of the Middle East though other retailers.
Prime Minister David Cameron said the incident was ‘unacceptable’ and called for an urgent investigation by the UK’s food standards agency.
The incident comes just one week after Tesco’s CEO said the company’s performance was improving thanks to a one billion pound sterling restricting plan and an increase in sales during the holiday season.
Analysts say the horse meat discovery is a serious blow to Tesco’s reputation and could be damaging for the company’s brand and sales but some say Tesco’s swift response and media outreach could limit potential losses.
“I think in anything like this it is really about damage limitation and how the company reacts to the news and Tesco has reacted fairly well, it’s taken out full page spreads in UK national newspapers basically engaging with their customer base telling them they understand their concern and they are doing all they can to rectify the problem, I think there may be a short term effect on sales but in the long term I think this will be soon forgotten,” said Michael Hewson, Chief Market Analyst, CMC Markets.
The scandal broke out earlier this week when an investigation by the Irish Food Safety authority found traces of horse and pig DNA as high as 29% in some cases, in products labeled as ‘beef’ sold at retailers in Tesco.
The products in question came from Irish and British suppliers who are thought to have mixed horse meat with beef.
Experts say that while horse meat isn’t a health risk...