Horsemeat: what are the long term impacts?

By Simone Baroke, contributing analyst

- Last updated on GMT

Related tags: Horsemeat scandal, Meat

Horsemeat: what are the long term impacts?
As the horsemeat scandal continues to spread across Europe and beyond, Simone Baroke, an analyst for Euromonitor, looks at the possible long term impacts.

The horsemeat scandal has shaken consumer trust in the food supply chain right down to its foundations, and more unsettling newsflashes about the murky goings-on in the meat processing industry are sure to surface over the coming weeks. The impact of this latest food scandal is manifold. In the short term, a shift from processed meat products back to fresh meat is expected, while over the medium to long term food labelling practices, which reflect the profound and permanent changes that need to happen in terms of sourcing and testing, are set for an overhaul. Not so funny for all concerned.

Minced meat has always been a favourite target for food adulteration jokes. Amid Europe’s spiralling horsemeat scandal, the genre is soaring to new heights. A recent cartoon in a German newspaper featured a customer complaining to a waitress, “I think my steak is neighing”​, to which the waitress replies, “Just be glad it doesn’t meow or bark”.

And while humourists are having a field day with this – and in fairly good conscience, because nobody is going to die as a result of eating the ‘wrong’ kind of meat – the situation could not be any more disastrous for the industry.

Now that large-scale panic testing has begun, new findings emerge daily, including the presence of donkey meat, illegal veterinary drugs and, quite predictably, pork in processed beef products. It is dawning on shoppers that this type of fraud has been going on for years, undetected and instigated not by one shady slaughter facility located somewhere in the backwaters of Transylvania, but that it has seemingly been happening all over the place, and that big-name brands and supermarkets have not done enough to prevent it.

Consumer outrage is a powerful force

It is really very hard to believe that the industry could have been so naïve. Consumers can hardly be blamed for trusting well-known brands and supermarkets. The latter, in particular, play the trust card big time in their private-label promotion schemes. Consumers have a right to ask how big-name manufacturers and retailers could be so gullible in their dealings with suppliers. After all, supply chains are long and there is always money to be made by cutting corners.

Tesco, the UK’s leading grocery retailer and whose value burgers are implicated, revealed to the Environment, Food & Rural Affairs Select Committee on 30 January that the new testing regime, which it had set up in response to the scandal, was to cost between £1m-£2m a year – this is hardly going to break the bank for a company whose retail value sales in the grocery channel in the UK alone amounted to just shy of £37bn in 2012.

In a recent interview with the BBC, a spokesperson from the British Retail Consortium (BRC), which reportedly represents 80% of the UK retail industry, stated the horsemeat issue “was not having an impact”.​ The organisation opined that people did not regard it as a threat to health, and hence there would be no change in consumer shopping habits. One has to wonder what particular planet the BRC resides on these days.

Consumers’ purchasing behaviour may not be motivated by fear in this case, but they are clearly angry, and consumer outrage is one of the most powerful catalysts for change there is.

Moving back to fresh

As a consequence, high street butchers and fresh meat counters in supermarkets will be drawing much longer lines than usual, as shoppers are eager to see their chosen cuts being minced in front of their own eyes. Many will resort to cooking from scratch, and fresh meat volume sales should see a revival over the next couple of years.

Euromonitor International statistics show that fresh meat volume sales across Western Europe increased by less than 1% over the 2007-2012 review period, while chilled processed meat enjoyed a 6% growth and frozen processed red meat achieved growth of about 2%. The horsemeat scandal may well transpose these growth statistics in favour of fresh meat.

Labelling practices to change

It is unreasonable to expect that foods containing processed meat will disappear from consumers’ shopping baskets. In the short term, sales will undoubtedly be hit, as wary consumers steer clear of ready-made lasagnes and burgers, but, in the end, the hankering after convenience will win out. What will need to change, however, is product labelling.

Manufacturers will have to work hard to convince consumers that a product is what it claims to be, with this entailing a clear label stating that the meat component of every batch of the product has been DNA-tested. And the sooner this is done, the better. There is no point waiting around until official bodies, like the UK Food Standards Agency, have completed their investigations and laid out a new set of testing procedures to prevent a scandal like this from happening again in the future. In-house testing has to happen right now, and food labels need to reflect this.

COOL more relevant than ever

Talking of labelling, country-of-origin labelling (COOL) has always been important to consumers. A recent study by the European Consumers’ Organisation (BEUC) revealed that 70% of Europeans considered the origin of a product as an important factor in their purchase decisions. This is even higher than those much-lauded ethical considerations, in which less than 50% pronounced a keen interest.

To clarify, at present, COOL labelling applies to olive oil, fresh fish, beef (fresh, chilled, frozen or minced), non-EU fresh or frozen poultry, wine, honey, eggs and most fresh produce. New regulation is coming into force in December 2014, from which point other fresh foods, including pork, lamb, goat and poultry, will also need to be labelled.

The BEUC research was published on 24 January 2012, and hence was carried out before the horsemeat scandal hit the headlines. If the same survey were to be carried out now, the percentage of consumers insisting on COOL labelling on fresh products would be much higher still, and they would also want to see it on processed items, which would be a far more complex task for the industry to undertake.

*Simone Baroke is a analyst for Euromonitor. For more information on Euromonitor's Fresh Food Research visit http://www.euromonitor.com/fresh-food

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