Why #HorseMeatGate matters

Summary

The picture is much more than ‘it’s still red meat’

I was in the supermarket earlier today, wondering whether Findus Crispy Pancakes had been taken off of the shelves. They had been – along with everything else under the same brand. For the company, this is a disaster. It will take years for the brand to recover – if it does at all. (They’re not doing so well at the moment – oh, & even tax havens get a mention too!) Far better for the brand to be terminated by its owners and for a new one to be launched once all of this has been dealt with. But that will take time and meanwhile, lots of people stand to lose their jobs in this latest of health scares.

“Hang on a minute – is horse meat bad for you?”

A number of people have said that we’re not dealing with a health scare, rather a case of mislabelling only. I disagree. Mislabelling implies a mistake. What we’re seeing in the meat processing industry is far more than this. We’re seeing systematic attempts to deceive the consumer into buying something that clearly is not what it says it is. As far as I’m concerned, it doesn’t matter where in the supply chain the activity took place, the supermarkets and the brands have a responsibility for checking and verifying the products they are selling are what they are.

In terms of horsemeat vs beef, do you think those responsible are thinking: “Hmm…shall we select the finest and healthiest cuts for these products?” Exactly.

One of the public health issues is with a drug called phenylbutazone which is used to treat horses. At higher concentrations, this drug is harmful to humans, which is why it is banned from horsemeat. But not only that. If manufacturers and suppliers have been able to avoid detection on the content of their products, what other rules and regulations have they got round?

Why regulation is important

It was less than three years ago that the then Health Secretary announced that he wanted to scrap the Food Standards Agency. Ultimately he was forced to back down. One of the remits that the Food Standards Agency has is dealing with ‘food fraud’. Hence why they are vital in this investigation. I sent Puffles after the agency, asking them if there were any alleged breaches of the law. They replied they have evidence of “gross negligence or deliberate contamination”. It is this sort of thing that you want to have a food regulator dealing with. The incentives for food fraud are simply far too great, and the issue of public health far too important to leave the whole thing to ‘self regulation.’ It’s even more important in this globalised world due to fractured supply chains as a result of outsourcing.

“Why is outsourcing an issue?”

Because it’s very easy to outsource responsibility and accountability – as we have found in the clothing and electronics industry. It’s very easy to say ‘we are working with our suppliers to resolve these issues’, saying that it’s their bad practice rather than a symptom of outsourcing that pushes down cost prices such as wages. Simply cancel the bad contract that’s in the news and set a new contract with another supplier with just as poor a record and no one is the wiser. Where does accountability and responsibility lie? Should the brands that outsource be culpable for the treatment of their suppliers?

With this obsession with outsourcing, how do you know you are getting what you ordered? One of the things this crisis has brought into focus is the number of firms there are involved in getting food to your plate. In centuries gone by, it might have been farmer – abattoir – butcher – table. But in the world of globalised food, how many more steps are there within the chain, and who has oversight of that entire chain? That is one of the problems the Food Standards Agency has to deal with too. It’s a massive industry too. The UK imports 40% of all of the food it consumes – a huge figure but not without historical precedence. Ever since the expansion of the British Empire the country has imported huge amounts of food – so much so that during the First and Second World Wars it was an issue of national security: The convoys. It was in those days that the lack of investment and innovation in UK agriculture was felt at its hardest.

This is an international issue too

Sweden is going through a similar crisis that we are – because they have similar suppliers and food brands. This means that ministers will have to co-operate with their European counterparts and with the EU authorities.

A crisis for ministers too?

Absolutely – and it’s a worst nightmare for any food minister. Politically you have very little room for manoeuvre, while at the same time you have to go on the advice of your specialists in the field – the scientists. What questions should you ask of your advisers before going to the press, knowing that anything you do say could make the crisis 100 times worse? Is this where you need a minister with a science background? Or a background in business with large and complex supply chains?

“So Pooffles, what’s the solution?”

Does this come back to: “If your firms are multinational, your regulators need to be too”?

There is also a significant transparency issue – especially with food multinationals. We found this out with Starbucks and tax avoidance. Should large food manufacturers and retailers be compelled to release more information about their supply chains and how they work? How is it for example that supermarkets can compel farmers to supply milk at below cost price? It cannot be good for animal welfare, the farmers or for consumers for that matter.

Then there is the dominance of major food companies across the piece – whether it’s the retailers at the consumer facing end, or whether it’s at the farmers’ facing end, such as in the coffee markets. Too much power concentrated in too few hands, forcing down prices for farmers while forcing up prices for consumers? Which regulators have the power and resources to regulate such interests? Clearly not at nation-state level – especially if they can lobby politicians to try and close down regulators. Should such correspondence be made public? What are lobbyists for big food companies lobbying for?

What we’re seeing with #HorseMeatGate is a symptom of something rotten at the heart of food processing industries. What things do I think need to be looked at? Things like:

  • Oversight and regulation of supply chains
  • Co-ordination of regulation from local (council trading standards) to international (EU) level
  • Greater transparency and education on where we get our food from & how it is produced
  • Investigating the international markets and the role/activities of food multinationals – looking at whether their presence &/or activities are beneficial for consumers and producers alike. (And if not, taking robust action to resolve it).

 It’ll be interesting to see what the Food Standards Agency publish this April

This entry was posted in Business economics and finance, Law and legal issues, Public administration & policy. Bookmark the permalink.

4 Responses to Why #HorseMeatGate matters

  1. DavidG says:

    I see interesting parallels between horsegate and what aviation has been going through over the past few years with counterfeit parts entering the supply chain from China and elsewhere. Just getting an adequate grasp on the risk we were exposed to was taking a substantial part of a former colleague’s time 4 years ago and what I read in the trade press seems to suggest it has gotten worse since.

    One particular problem for aerospace was that falsely marked products might not be too much of a concern if they didn’t work at all (at least in safety terms) as they wouldn’t get through testing, but if they worked for a few months and then fell over, potentially while in the air, then that would be far more of a concern. The parallel for horsemeat (or other uncertified meat stocks) may be that we know to check for Bute, but are there other things we should be checking for that won’t become apparent until tragedy hits?

    Another parallel may be between aerospace’s need to buy up odd scraps of chips from old stock held by anyone they can find (because the IC market evolves much faster than aerospace can test, meaning chips are often out of mass-market production by the time they are certified for aviation use, and stocking a production run may therefore mean sourcing components wherever you can find them), and food retailers exerting a continuous pressure on food production companies to source stock from the cheapest meat producers they can find. Each introduces a market driver that forces the producer to expose itself to smaller and riskier suppliers, no matter the consequences on the ultimate user. Are market dynamics as much a problem as criminal conspiracy?

  2. Scribe says:

    See also: metals in your gadgets, labour to make your clothes (and gadgets), GM labeling in food, foreign government access to your Internet/phone traffic, the history of white bread, etc etc etc. Ultimately, I think we care more about a) convenience and b) status symbols than the “thing” itself – and its history.

    The problem is we only care once/if we’re affected as a *consumer*. There’s no incentive to find out about an item’s provenance, and in fact there’s a very real *disincentive* to do so if it means it’ll make something more expensive or inconvenient.

    Some of the “solution” needs to be more transparency and openness – not just around meat, but other food products, and products generally – this is the production culture shift needed.

    But there’s also a corresponding shift needed in consumption culture too. It has to move somehow away from a) an inherent disconnect between your money, and where what you spend it on comes from, and b) an inherent lust for status symbols, such as the “right” to be able to eat meat dressed up as some kind of feeling of anti-vegetarian necessity.

    Is that going to happen? Nope. Are we going to see more of the same? Yup.

  3. Pingback: No thank you, I’m a little horse | Edinburgh Eye

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