British shoppers may pay high price from horsemeat scandal

[Ringwraiths]

British shoppers may pay high price from horsemeat scandal

By James Davey and Neil Maidment
LONDON | Tue Feb 19, 2013 11:33am EST

(Reuters) - For Britons worried last week's beef lasagne was in fact a helping of horse, peace of mind that such a meal will never reach dining tables again may come at a price.

Livestock specialists say that contrary to some public comments by supermarkets, ensuring a chain of quality from farm to table will cost money - particularly at the cheaper, ready-made meal end.

"How can you supply a meal for two people for a pound," said Andrew Hyde, managing director of British meat supplier Traymoor.

"I know what things cost and I know that if I was to put six ounces of quality mincemeat into a lasagne or a cottage pie then I would have to charge twice that price," he said.

The horsemeat scandal, which has triggered product recalls across Europe and damaged confidence in the food industry, erupted last month when tests in Ireland revealed some beef products sold there and in Britain contained equine DNA.

The British government has come under pressure to act and to explain lapses in quality control. Supermarkets, catering and restaurant firms, as well as food manufacturers, are battling to restore consumer confidence amid a welter of lurid headlines playing on a popular British queasiness about eating horsemeat.

Although Tesco, Britain's biggest retailer, has said raising standards "doesn't mean more expensive food," many in the meat industry are not convinced.

"Producing high quality, fully traceable, high welfare standard livestock costs money to put on peoples' tables," said Peter Garbutt, chief livestock adviser for Britain's farmers union, the NFU.

He said consumers had to be more realistic.

Lawmakers are expected to respond to the scandal with further regulation to ensure an ongoing regime of product testing, quality assurance and policing of standards.

With DNA testing costing up to 500 pounds ($770) per sample, creating a robust regime will not come cheap.

PRICE RISES

Analysts reckon value lines, such as frozen beefburgers or spaghetti bolognese ready-meals, are currently so cheap and profit margins so thin that supermarkets have little room for manoeuvre.

They say that spells increased margin pressure for already squeezed suppliers and price rises for consumers.

"I don't think there's any way that we can escape the viewpoint that the price of having guaranteed food in terms of it contains what it says it contains is ultimately higher prices," said Neil Saunders of retail research agency Conlumino.

"We might be speaking about a couple of pence on an item, because this is a game about volume."

That would add to food price inflation, already running at 4.9 percent in the 12 weeks to January 20 as a result of high commodity prices, according to market researcher Kantar, causing a further squeeze on the budgets of shoppers reeling from meager wage rises and government austerity measures.

That is a scenario lawmakers fear.

"The consumer cannot be left to face a Catch-22 where they can either pay for food that complies with the highest standards of traceability, labeling and testing, or accept that they cannot trust the provenance and composition of the foods they eat," said Anne McIntosh, a legislator who chairs the cross-party Food and Rural Affairs Committee, which published a report into the scandal last week.

Food experts say globalization has helped the food industry grow, but has also created a vast system which has fuelled the risk of adulteration.

Mark Price, managing director of upmarket British grocer Waitrose, told Reuters the horsemeat scandal was the inevitable result of big grocers putting pressure on suppliers.

"If you have a competition that says: Who can sell the cheapest stuff? Inevitably at a point in time you will get something like this," he said.

Two Competition Commission investigations have cleared supermarkets of unduly pressuring suppliers.

Tesco CEO Philip Clarke said on Friday he had ordered a review of the firm's approach to its supply chain. He wants relationships with its suppliers to become more "transparent and collaborative".

Co-operative Group CEO Peter Marks similarly spoke of taking a closer look at its supply chain.

Meanwhile, although the horsemeat scandal has undermined grocers' relationship with customers, investors appear unperturbed.

Last week, the height of the crisis, shares in Britain's food retail sector rose 1.2 percent. So far this year the sector is up 6.2 percent.

($1 = 0.6460 British pounds)

(Editing by Jeremy Gaunt.)

 

[Leona]

Disgusting!

 

[banglat]

How Romanian workhorses reach the dinner plate

Romania, February 13, 2013

POROSCHIA - Florin Dumitru, like millions of subsistence farmers in Romania, the European Union's second-poorest country, will have no choice when the horse that ploughs his scrap of land can no longer earn its keep.

"What do you have to do when he can't plough or pull a cart any more? You just sell it to the slaughterhouse to butcher it,"said Dumitru, 40, who lives in Poroschia, home to one of Romania's big abattoirs.

After slaughter, some of Romania's horses, the only option for the many farmers who can't afford a tractor, have found their way across Europe, through processors and middlemen and finally into frozen meals masquerading as beef.

Increasing globalisation in food production and pressure from retailers to drive down costs has created a fiendishly complicated supply chain, particularly for processed foods with multiple separately sourced inputs, raising the risk of adulteration, whether by design to save money through cheaper ingredients or through poor standards.

Industry sources say the abattoirs pay about 3.5 lei (S$1.33) per kilo for a horse, but 5.5 lei/kg for a cow.

The animals butchered in Romania took a roundabout route to British and French dinner tables, via Dutch and Cypriot traders and a French company that supplied meat to a Luxembourg factory belonging to a second French firm, Comigel. It still remains unclear how and where the horse became "beef".

Romanian officials say their abattoirs meet EU standards and their investigation has cleared the two possible sources of the horsemeat, one in Transylvania and the other at Botosani close to the borders with Ukraine and Moldova, of relabelling it.

"If you are looking for a guilty party in this, it is rural poverty in Romania," said Stuart Meikle, an agricultural investment adviser who has run a farming business in Romania.

"This is part of a much wider rural poverty issue. The government has glossed over it, and the international community has largely not bothered to find out what is really happening."

Agriculture in Romania is outdated, with fragmented farmland - Dumitru farms less than an acre (0.3 hectares) - and little mechanisation. For every square kilometre of arable land, Poland has more than six times the number of tractors that Romania can muster. Horse-drawn carts share the road with trucks.

RURAL CULTURE



Around the CarmOlimp abattoir at Ucea de Jos, one of the two cleared by Romanian authorities of labelling horse as beef, horses still plough the plateau below the Fagaras mountains.

In Romania, where the average wage is 350 euros a month, a quarter of France's minimum, agriculture employs 30 per cent of workers but accounts for only 7 per cent of gross domestic product, according to the World Bank.

That compares with 1-2 per cent of GDP in France and Germany and 2-4 per cent in other former communist members of the European Union.

CarmOlimp executive director Paul Soneriu, whose parents founded the company in 1993, said it produced about 60 tonnes of horsemeat last year, less than 1 per cent of turnover. Most of its business is pork products.

"In Romania, the horse is not a noble animal like in England; it is just an animal for work," he said. "When it becomes a burden for the villager because of its age or lack of feed, the Romanian peasant tries to make some money out of it."

Soneriu, a tall, dark-haired 29-year old, is well connected.

Local press dubbed his brother Valentin the richest member of Romania's government when he was appointed a junior agriculture minister last month, estimating his family wealth at up to 25 million euros.

Speaking in his office among the modern, grey-blue buildings scattered across the snowy Transylvanian landscape, Soneriu denied any wrongdoing and said his company implemented a system of checks that made it impossible to label horse as beef.

He said the abattoir, which was partly built using funds from Brussels, had invested in food safety and product traceability systems to meet EU standards.

Employing some 700 people, CarmOlimp did not allow Reuters access to the working facilities due to safety requirements, but Soneriu said Romania's animal health authority had thoroughly checked the plant, including scrutinising invoices and mail, and found nothing amiss.

The slaughterhouse does not keep frozen horsemeat as stock and buys animals from local farmers when there is an export order. Every animal has to be checked by a vet both before and after purchase, and then again on the production line. It has never processed donkey meat.

"In 12 months of last year we only had three export orders, or three trucks with boneless frozen horse meat, to a private company in the Netherlands," Soneriu said.

SAD INDICTMENT



The British government and the EU have called for "horsemeat summits" to investigate the food scandal, with British officials surmising that a criminal conspiracy would be found responsible for substituting cheaper horsemeat for beef.

The issue will be on the agenda of the next formal meeting of EU agriculture ministers on Feb. 25.

"I am a little amazed at the whole chain involved; it is a sad indictment of the food industry," said Meikle.

It is not just British consumers who can't stomach the prospect of eating horse; some of Romania's farmers are distressed at the thought of their animal becoming someone's dinner.

George Bandea, 63, took to farming when he retired from a hydro-power plant and has a three-year-old horse that pulls his plough and cart.

"It's like working with a kid. It will take about one year to fully train him," Bandea said at his house near the abattoir in Ucea de Jos.

"I will sell him when he reaches 10 or so. But I cannot sell him to the slaughterhouse to be killed," he said. "After you know and use him you can't send him to death and be cut into pieces. No way. I couldn't do such a thing."

The farmer that buys Bandea's horse might get another 10 or 15 years' work out of him, but his fate might still be the abattoir. What happens thereafter could depend on the ramifications of the current scandal.