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New food supply chain scandal rocks UK industry

Ten years on from the Horse Meat scandal which rocked the European processed food industry, food fraud is back in the media spotlight. In March 2023, an investigation by the UK publication, Farmers’ Weekly, has demonstrated once again that the complexity and opacity of food supply chains makes them highly vulnerable to criminal activity, especially at a time when there is so much pressure to reduce costs. The article can be read in full here.

The report alleges that a major food manufacturer, responsible for supplying some of the UK’s biggest retailers, routinely passed off ‘huge quantities’ of foreign meat as British and, by doing so, achieved a much higher premium. The technique, known as country-of-origin fraud, involves buying a small proportion of British pork which is then mixed with a far higher level of cheaper, foreign meat. The traceability information from the British proportion is then used for the entire shipment. EU bacon medallions, the example used in the report, were being sourced at £1 per kg and then sold on as British at £12 per kg. Some Danish pork had been diverted from sale in the Chinese market to the UK and cheaper Irish meat was also allegedly substituted for British.

The case has significance for a number of reasons. Consumers are often willing to pay more for meat products which they believe to be sourced sustainably from farms conforming with high UK standards of animal welfare. There were also allegations that the food processor was using products unfit for human consumption, creating a public health issue. Given that some of its customers included the UK’s largest supermarkets, this latest scandal presents an enormous risk to not only their brand equity but the wider industry as a whole. Following the Horse Meat scandal, sales of ready meals fell by 13% and frozen burgers by 16%. In contrast, many smaller retailers, such as local butchers and farm shops, saw an up-surge in demand as consumers placed their trust in locally sourced goods and the enhanced provenance of direct farm-to-fork supply chains.

The authors of the Farmers’ Weekly report make recommendations to reduce the likelihood of illegal substitution in the future:

  • Digitize supply chain record keeping - it is far harder to tamper with digital tracing.

  • Make sure that audits of food processors by their customers are more effective.

  • Ensure that there are full records for the amount of British meat entering the factory as well as the amount leaving. As supply chain records are kept on a customer-by-customer basis it was possible for the company to augment British meat with foreign. An overall ‘mass balance’ for the factory would have shown up this practice.

In many parts of Europe, Asia and the US, blockchain technology is being trialled to enable full visibility of food supply chains and this will also make criminal intervention much more difficult. Such technology should provide customers with more confidence about the provenance of their food from an animal welfare, environmental, cultural, religious and, of course, health perspective. However, that is a very long way from the practices and reality which have been revealed by the investigation. If proven, the illegality exposes the failings of the UK regulators whose job it is to protect the public. It also erodes trust in the brand and marketing of the retailers which have wrongly charged a premium for food packaged as British. It seems that the supply chain risk lessons from the Horse Meat scandal have yet to be learnt.

For more information on John Manners-Bell’s book, Supply Chain Risk Management, now in its third edition, follow the link to the Kogan Page website.

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