Were two private equity buyouts the real cause of the horse meat scandal?

A series of buyouts went all the way up the food chain.

A note on the horse meat scandal that only seems to have flagged up so far: Findus, the most recent company under fire for horsemeat-contaminated products, was bought out by private equity firm Lion Capital in 2008.

Private equity firms make companies more efficient then re-sell, turning a profit in the process. They are also known for piling the companies they buy with debt and forcing them into radical cost-cutting measures - and a quick scan of Findus's last half decade suggests this is exactly what happened here. Findus struggled after the buyout, and recently needed a £220m cash injection to stay afloat. It was also forced into "major restructuring" last year. Was there a point at which using cheaper meat became necessary?

On Friday attention turned to Comigel - the company that supplies meat to Findus, as well as Aldi, another company which is even now hastily clearing its shelves of "mislabelled" bolognaise and lasangne. Surprise, surprise: in 2007, Comigel was bought by French private equity firm Céréa Capital.

Private equity firms are used to being the villain of the piece: post 2008, some argued that their penchant for cheap credit would be the cause of the next financial crisis. It's not all bad though - as this Moody's report suggests, companies which have been bought out are much more likely to survive when the going gets tough.

But the key point here is that some companies can't afford to be radically restructured to the point at which the product is compromised. And this includes food companies. Forget DNA tests - we should be keeping an eye out for food with chains of bought-out companies in their supply lines - that's where the next food scandal'll come from.

Horse meat scandal could be rooted in private equity. Photograph: Getty Images

Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill.

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Commons Confidential: Fearing the Wigan warrior

An electoral clash, select committee elections as speed dating, and Ed Miliband’s political convalescence.

Members of Labour’s disconsolate majority, sitting in tight knots in the tearoom as the MP with the best maths skills calculates who will survive and who will die, based on the latest bad poll, observe that Jeremy Corbyn has never been so loyal to the party leadership. The past 13 months, one told me, have been the Islington rebel’s longest spell without voting against Labour. The MP was contradicted by a colleague who argued that, in voting against Trident renewal, Corbyn had defied party policy. There is Labour chatter that an early general election would be a mercy killing if it put the party out of its misery and removed Corbyn next year. In 2020, it is judged, defeat will be inevitable.

The next London mayoral contest is scheduled for the same date as a 2020 election: 7 May. Sadiq Khan’s people whisper that when they mentioned the clash to ministers, they were assured it won’t happen. They are uncertain whether this indicates that the mayoral contest will be moved, or that there will be an early general election. Intriguing.

An unguarded retort from the peer Jim O’Neill seems to confirm that a dispute over the so-called Northern Powerhouse triggered his walkout from the Treasury last month. O’Neill, a fanboy of George Osborne and a former Goldman Sachs chief economist, gave no reason when he quit Theresa May’s government and resigned the Tory whip in the Lords. He joined the dots publicly when the Resolution Foundation’s director, Torsten Bell, queried the northern project. “Are you related to the PM?” shot back the Mancunian O’Neill. It’s the way he tells ’em.

Talk has quietened in Westminster Labour ranks of a formal challenge to Corbyn since this year’s attempt backfired, but the Tories fear Lisa Nandy, should the leader fall under a solar-powered ecotruck selling recycled organic knitwear.

The Wigan warrior is enjoying favourable reviews for her forensic examination of the troubled inquiry into historic child sex abuse. After Nandy put May on the spot, the Tory three-piece suit Alec Shelbrooke was overheard muttering: “I hope she never runs for leader.” Anna Soubry and Nicky Morgan, the Thelma and Louise of Tory opposition to Mayhem, were observed nodding in agreement.

Select committee elections are like speed dating. “Who are you?” inquired Labour’s Kevan Jones (Granite Central)of a stranger seeking his vote. She explained that she was Victoria Borwick, the Tory MP for Kensington, but that didn’t help. “This is the first time you’ve spoken to me,” Jones continued, “so the answer’s no.” The aloof Borwick lost, by the way.

Ed Miliband is joining Labour’s relaunched Tribune Group of MPs to continue his political convalescence. Next stop: the shadow cabinet?

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage