Horsemeat scandal: it's all in the supply chains

You reap what you sow.

Up until very recently, most of us would have confidently asserted that we had never eaten horsemeat in our lives. Today, our responses would likely be more hesitant as we think back over the various processed products we have consumed. In many ways, this is the very essence of the current crisis: the adulteration of meat has left us highly uncertain about what we are consuming; if products contain extraneous horsemeat what else might be hiding within?

This erosion of confidence and trust has serious implications for both the retail and food processing industries. Consumers have already reacted swiftly, ditching brands and products tainted by the scandal, with many rediscovering the local butchers they once abandoned in favour of the big supermarket chains. As new developments come to light, we should expect to see habits change still further.

Retailers will be thankful for the fact that the crisis is now of such scope and scale that blame has been dispersed over a wide area with no one in particular in the crosshairs. However, we should not allow the diffused nature of the situation to become an excuse for doing nothing. Indeed, the truth is that while the modern food supply chain might be complex and intricate, the roots of the matter are fairly self evident.

Despite being concentrated into the hands of relatively few players, food retailing in most western nations, and especially in the UK, remains highly competitive. In recent years this has intensified for two main reasons. Firstly, commodity inflation allied with the downturn has made the consumer far more price sensitive and has opened up a new battleground focusing on value. Secondly, following massive space expansion over recent years the market is now fairly saturated; with little organic growth this has resulted in each player trying to grab share from its neighbour while at the same time defending its own. Ultimately, both of these dynamics have resulted in a relentless focus on driving down prices to create competitive advantage.

Modern consumers have been beneficiaries of this focus; food bills today are much lower than they were 50 years ago. So, lower prices per se are not necessarily a bad thing. What is critical, however, is how those low prices are attained. When they arise from improved efficiency or scientific advances then the overall impact is generally a positive one. When they arise from exerting too much pressure on suppliers or from reducing checking and transparency then the impact can be catastrophically negative.

In the early days of reducing prices retailers tended to make savings from efficiency gains but now most of these have been extracted eking out further savings can really only come from one place: cutting corners. The pressure to trim every possible cost is enormous and the whole supply chain from farm to fork is now so tight that it was probably only a matter of time before a crisis arose. In other words, this is more than an accident; it is a direct consequence of the behaviours within the industry.

As the final link in the supply chain, retailers must bear the responsibility for what is sold. However, there is arguably another actor who is also liable: the consumer. Buying food is not discretionary; it’s something we all need to do, and do regularly. As such, it accounts for a very large proportion (around 45 per cent) of all that we spend on retail. If we can reduce the amount we spend during our weekly grocery shop then we have more scope to buy other more exciting consumer goods; so, we happily laden up our trolleys with value ready meals and cheap cuts of meat in order than we can shave a bit off our bill. How many of us, though, really thought about that 99p ready meal and asked “is this really too good to be true?” The answer is not nearly enough of us.

None of this is to excuse retailers or manufactures, but it does open up an important question about the current realism in terms of economics within the food industry. Part of solving this matter and guaranteeing, as far as possible, food which is free from contaminants has to be the acceptance of higher prices. Notably, when we talk about higher prices we are not talking about massive hikes but a few pence here and there. Certainly, that’s unwelcome in the current economic environment but it is a necessary price to pay.

Will consumers wear it? Their reaction to horsemeat suggests that they probably will. The fact that many are already buying more expensive foods or using butchers which charge a little more suggests there has been a subtle shift in attitude. Will retailers wear it? Arguably they should; being the cheapest at all costs may well bring some short term market share gains, but if it ultimately undermines long term confidence in the brand it becomes something of an own goal.

The bottom line is that when it comes to food prices the old farming adage is as true now as it ever was: you reap what you sow.

Photograph: Getty Images

 Managing Director of Conlumino

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For 19 minutes, I thought I had won the lottery

The agonising minutes spent figuring out my mistake paired beautifully with hard, low wisdom tooth throbs.

Nineteen minutes ago, I was a millionaire. In my head, I’d bought a house and grillz that say “I’m fine now thanks”, in diamonds. I’d had my wisdom tooth (which I’ve been waiting months for the NHS to pull the hell out of my skull) removed privately. Drunk on sudden wealth, I’d considered emailing everyone who’s ever wronged me a picture of my arse. There I was, a rich woman wondering how to take a butt selfie. Life was magnificent.

Now I’m lying face-down on my bed. I’m wearing a grease-stained t-shirt and my room smells of cheese. I hear a “grrrrk” as my cat jumps onto the bed. He walks around on my back for a bit, then settles down, reinstating my place in the food chain: sub-cat. My phone rings. I fumble around for it with all the zeal of a slug with ME. Limply, I hold it to my ear.

“Hi,” I say.

“You haven’t won anything, have you” says my dad. It isn’t a question.

“I have not.”

“Ah. Never mind then eh?”

I make a sound that’s just pained vowels. It isn’t a groan. A groan is too human. This is pure animal.

“What? Stop mumbling, I can’t hear you.”

“I’m lying on my face,” I mumble.

“Well sit up then.”

“Can’t. The cat’s on my back.”

In my defence, the National Lottery website is confusing. Plus, I play the lottery once a year max. The chain of events which led me to believe, for nineteen otherworldly minutes, that I’d won £1 million in the EuroMillions can only be described as a Kafkaesque loop of ineptitude. It is both difficult and boring to explain. I bought a EuroMillions ticket, online, on a whim. Yeah, I suffer from whims. While checking the results, I took a couple of wrong turns that led me to a page that said, “you have winning matches in one draw”. Apparently something called a “millionaire maker code” had just won me a million quid.

A

Million

Quid.

I stared at the words and numbers for a solid minute. The lingering odour of the cheese omelette I’d just eaten was, all of a sudden, so much less tragic. I once slammed a finger in a door, and the pain was so intense that I nearly passed out. This, right now, was a fun version of that finger-in-door light-headedness. It was like being punched by good. Sure, there was a level on which I knew I’d made a mistake; that this could not be. People don’t just win £1 million. Well they do, but I don’t. It’s the sort of thing that happens to people called Pauline, from Wrexham. I am not Pauline from Wrexham. God I wish I was Pauline from Wrexham.

Even so, I started spending money in my head. Suddenly, London property was affordable. It’s incredible how quickly you can shrug off everyone else’s housing crisis woe, when you think you have £1m. No wonder rich people vote Conservative. I was imaginary rich for nineteen minutes (I know it was nineteen minutes because the National Lottery website kindly times how much of your life you’ve wasted on it) and turned at least 40 per cent evil.

But, in need of a second opinion on whether or not I was – evil or not - rich, I phoned my dad.

“This is going to sound weird,” I said, “but I think I’ve won £1 million.”

“You haven’t won £1 million,” he said. There was a decided lack of anything resembling excitement in his voice. It was like speaking to an accountant tired of explaining pyramid schemes to financial Don Quixotes.

“No!” I said, “I entered the EuroMillions and I checked my results and this thing has come up saying I’ve won something but it’s really confusing and…”

Saying it out loud (and my how articulately) clinched it: my enemies were not going to be looking at butt selfies any time soon. The agonising minutes spent figuring out my mistake paired beautifully with hard, low wisdom tooth throbs.

“Call me back in a few minutes,” I told my dad, halfway though the world’s saddest equation.

Now here I am, below a cat, trying to explain my stupidity and failing, due to stupidity.  

 

“If it’s any consolation,” my dad says, “I thought about it, and I’m pretty sure winning the lottery would’ve ruined your life.”

“No,” I say, cheese omelette-scented breath warming my face, “it would’ve made my life insanely good.”

I feel the cat purr. I can relate. For nineteen minutes, I was happy too. 

Eleanor Margolis is a freelance journalist, whose "Lez Miserable" column appears weekly on the New Statesman website.