Horsemeat scandal: The business impact

Findus Beef Lasagne Findus Beef Lasagne was withdrawn from sale after 100% horsemeat was found in some products

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The latest scandal surrounding horsemeat in processed food could be "disastrous" for the meat processing industry, retail analysts are warning.

Lost contracts with supermarkets "will undoubtedly cost them millions of pounds", Neil Saunders of retail analyst Conlumino told the BBC.

"The loss of supply contracts could be disastrous for food suppliers."

The Food Standards Agency now wants the industry to test all its processed beef products.

The British Meat Processors Association, whose members produce 80% of meat sold in the UK, said: "It's too early to say what the impact will be on our industry. The BMPA is co-operating with the FSA [Food Standards Agency] to establish the facts, and to deal effectively with the issues."

One supplier, meat processor Silvercrest, based in County Monaghan, Ireland, lost supply contracts with Tesco, Aldi and Co-operative supermarkets after the Food Safety Authority of Ireland (FSAI) found horse and pig DNA in burgers it supplied.

"It wouldn't surprise me if there were redundancies," said Mr Saunders.

A spokesperson for ABP Food Group, which owns Silvercrest, said: "We feel it would be inappropriate to comment at this stage."

Testing regime

In a statement issued on Friday, the FSA said: "In addition to the widespread testing we are doing, we've instructed the industry to urgently carry out its own tests on processed beef products to see whether horsemeat is present."

But this new testing regime could cost the industry millions of pounds.

Giving evidence to the Environment, Food & Rural Affairs select committee on 30 January, Tim Smith, Tesco's group technical director revealed that the supermarket's new DNA testing regime, introduced following the discovery of horsemeat in its value burgers, would cost it "£1m to £2m a year".

Meanwhile, Tesco's sales loss would be "a lot bigger than a million pounds" as a result of the scandal, he said.

But Richard Dodd of the British Retail Consortium, which represents 80% of the UK retail industry, told the BBC: "What we're hearing from our members is that this [horsemeat] issue is not having an impact. People are clear that it isn't a health issue, so it's not producing a change in customer shopping habits."

And Conlumino's Neil Saunders agrees that the supermarkets are unlikely to be affected much by the scandal, since they can claim compensation from their suppliers.

"While it is highly likely that sales will have deteriorated in some food lines, such as value burgers, other categories may have benefitted, meaning that there is little net loss overall," he said.

Traditional High Street butchers might even be benefiting from the horsemeat scandal, says Richard Stevenson, technical manager of the National Federation of Meat and Food Traders.

"Our members are telling us that they're all getting more business since the Tesco burger issue, because most butchers know exactly where their meat has come from. You could argue that this issue has arisen as a direct result of the cheap food policy adopted by supermarkets."

Findus, which had to withdraw its beef lasagne ready meals after some samples were found to contain 100% horsemeat, said on Friday that it had tested all its other beef products and found no evidence of contamination.

What UK consumers spend on beef

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  • rate this

    Comment number 230.

    The only thing thats going to stop these corporate crooks from selling us their lies is mass litigation.
    Yes I unwittingly ate a frozen 'beef' lasagne, it disgusts me. I will join any joint law suit
    I am not interested in compensation. Any financial compensation I will give to horse sanctuaries. Horses are not farmed for food. Dogs cats or even humans may be next

  • rate this

    Comment number 229.

    If people are too lazy to go to a proper butcher and rather buy cheap supermarket "meat" because they can't bothered to do the small effort it would take, then they deserve to get the junk they buy so cheaply.
    They may argue that they haven't got the time to go somewhere else, however many butchers are quite willing to deliver your meat to your house if you are a regular customer.

  • rate this

    Comment number 228.

    The real point of all this is food labelling, if it say beef or pork that's what it should be otherwise its a criminal offence of fraud.

  • rate this

    Comment number 227.

    The point is that beef is supposed to be safe and even traceable back to a specific farm.

    Supermarkets and cheap burger manufacturers are selling "beef" products with meat in them that they have absolutely no idea where it came from, other than it was a horse.

    There are strict rules about raising beef cattle, all of which become irrelevant when you stick a label of "beef" on horsemeat.

  • rate this

    Comment number 226.

    For me there are two concerns 1- that ingredients lists can not be trusted, if the seller can not guarrantee it , I expect Tesco to satisfy itself that what it says is true and not rely on a supplier of raw ingredients claims 2 - if they can not what else is in there. You can eat cheaply and quickly using fresh ingredients that have no need of content labels.

  • rate this

    Comment number 225.

    24. Afro
    .....we don't have any hangs up about the horses hair being used for fishing lines.


    I don't know when you last bought fishing line but it has been made from nylon monofilament & other artificial fibres for more than half a century.
    The issue isn't moral - it's legal, as a massive fraud has been perpetrated, or rather several massive frauds.

  • rate this

    Comment number 224.

    To those people saying “meat is meat”, horse is tasty etc. If you paid for a Ferrari but they gave you a Kia, would you accept it? After all, a car is a car.
    Also the smug vegetarians would not be so smug if they find that genetically modified fruit & veg had been introduced into the food chain without them knowing.
    This is about honesty and putting a honest list of ingredients on packets

  • rate this

    Comment number 223.

    Whether it's the banks, MP's expenses or now food it comes down to greed and corruption.
    Somebody somewhere, listening to the news in either Romania, France or Luxembourg, has said "yep, I can do that, for a small off the record fee of course"
    And like the Stafford Hospital EVERYONE will claim "nothing to do with me guv!"
    The ONLY cure is very long prison sentences
    I personally have had enough!

  • rate this

    Comment number 222.

    @ iDominic

    I really don't care. its not a safety issue. frankly the main issue is that people seem to believe cheap frozen beef burgers are 100% beef, or similar comparisons. yes. it should be investigated, and yes, someone along the way needs to explain themselves, but as long as the food i get isnt gonna make me ill, i couldnt give a monkeys if its beef, horse or chimpanzee.

  • rate this

    Comment number 221.

    I have no problem with eating horse. Like anyone else who has travelled outside the UK I almost certainly have already done so.

    I do have a problem with meat of 'unknown origin' which may not have been subject to normal animal welfare regulations when it was alive or food hygiene regulations after it was dead.

  • rate this

    Comment number 220.

    Customers aren't to blame, they don't demand lower prices, they are offered lower priced products, there is a difference.

  • rate this

    Comment number 219.

    The basic failure to correctly identify content indicates that manufacturing controls are weak therefore no processed food can be assumed safe.
    Extensive testing to check quality is urgently required.
    Start with microbial and pesticide contamination.
    Inspect all the manufacturing premises for vermin and hygiene.

  • rate this

    Comment number 218.

    210. Gaz

    I have two questions about all this carry on.
    Are horses tasty? And if so, why are we not eating them?

    You ought to have a couple of slightly more important questions niggling away at the top of your list.

    1 Do our food producers care one tiny little bit where they buy their meat from, and how it is produced?

    2 Can they get away with not being bothered about it until they are caught

  • rate this

    Comment number 217.

    Assuming your aren't a vegan, what species does your milk come from?

  • rate this

    Comment number 216.

    Why do the British people put up with this incompetence ?

  • rate this

    Comment number 215.

    "Don't dump meat products - minister "


    Since he's arguably a meat product, this sounds like self-preservation. Doubt it will work.

  • rate this

    Comment number 214.

    these companies are admitting what 90% of the population knew already Its not the horse meat that worries me its the rest of the ingredients that we dont know about

  • rate this

    Comment number 213.

    All these so called inspectors have no real power the goverment has seen to that.

  • rate this

    Comment number 212.

    Astonishing how badly Findus have handled this compared with Tesco's. Unfortunately this is probably a reflection of the competence of their management.

  • rate this

    Comment number 211.

    I just ate a slug that was in my lettuce, it didn't say anything about that on the label.
    Perhaps we should take all fruit and veg off the shelves as well, then we could all become airarians and not worry about food contamination ever again.


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