19 May 2013

Horsemeat, s’il vous plaît

Bogdan Scurtu

In a globalized world with increasingly complex business networks, including in the food industry, the horsemeat scandal shows the need for effective governmental oversight over open markets and free trade. Otherwise, one can follow the Chinese model with beautiful laws and food-safety on paper that works with “great success,” as Borat would say.

HorsemeatEU Horsemeat Producers source: © EuroPoint 2013

When I started following the horsemeat scandal in January 2013, it was a local story. Someone found horsemeat DNA in a beef patty from UK’s Burger King, then in ready-made frozen lasagna in a supermarket in Sweden. Quickly, horsemeat was traced from a couple of Romanian slaughterhouses, such as Carmolimp, to dealers based in Cyprus and the Netherlands, then to the French company Spanghero, the Comigel processing plant in Luxembourg, Findus frozen food in Sweden, Ireland’s Silvercrest, the Tesco supermarket in the UK, as well as other supermarkets in Sweden. A few weeks later, inspectors discovered horsemeat in Nestle products and Ikea meatballs. It was becoming clear that the horsemeat scandal was not an isolated incident. Recently, a prime suspect has been identified: Willy Selten and his import-export companies, “Wiljo Import en Export BV” and “Vleesgroothandel Willy Selten.”

In the EU, food safety falls under the Executive Agency for Health and Consumers, a European Commission agency whose main concern is public health (as is the case in the US, where the Food and Drug Administration falls under the Department of Health and Human Services). Thus, it is the public health angle that provides the loophole for illicit business practices: as long as it’s non-clinical, few if any safety alerts will be triggered.

The reasons for substituting horsemeat with some sort of sauce or spices to mask the taste difference in products labeled minced beef are many. Supermarkets have to compete to maintain low consumer prices. The food chain from slaughterhouse to table has many players. In my innocence, I wasn’t even aware of the existence of “food traders.” Now I am wondering what their main function is: are producers and distributors not able to find each other, are these intermediaries needed? How do they affect food prices? Or the quality of meat? These are rhetorical questions.

Lack of regulation is not the issue. Jose Manuel Barroso, President of the European Commission, defended the existing regulations in an interview with Euractiv. Debates in Brussels centered on introducing tougher penalties for violations and new regulations, such as requiring frozen products to indicate the origins of the meat. Now, more and more voices insist the true issue is that of controls. As Bart Staes, a Belgian member of the Socialist group in the European Parliament asked, “Can member states carry out inspections, given the cuts? Which member states are doing well and which not doing well? The Commission is making savings too. Staff and funding cuts mean restricting the quality of controls.”

And Tonio Borg, the EU Commissioner for Health and Consumer Policy, said: “Those who think that the European Union or the Commission has an army of inspectors and wardens to implement legislation in this field or any other should know that there is nothing in existence of this sort.”

Corruption is affecting various levels of government, especially in poorer EU countries and in Eastern Europe, where political elites are less experienced with the democratic process and the issues of public responsibility. The 2012 global Corruption Perception Index placed Denmark and Finland on top with a score of 90 out of 100 (the higher the score, the less corrupt). Respectively, Romania, Italy, Bulgaria, and Greece scored 44, 42, 41 and 36 out of 100 (well behind Rwanda, Ghana, and even Cuba).

In February, the European Commission ordered testing across the EU. First results showed that up to 5% of all EU beef products contain horsemeat. The Commission determined that the EU was dealing with a “labeling scandal,” decided to increase the fines for food fraud, and tighten controls throughout the food chain.

The horsemeat scandal has also endangered EU agricultural exports, worth €100 billion a year. Russia already found traces of horsemeat in beef imports from Austria and scrapped agricultural imports from a German plant in an apparently non-related case.

Minced MeatMinced Meat source: © EU 2013

To restore confidence in their products, businesses have begun to self-regulate. Having lost their most lucrative contracts with Burger King, Aldi, and Tesco, the ABP Food Group has sold its Silvercrest plant. As consumers are favoring locally sourced food, the food supply chain is shrinking back to the future. Restaurants in downtown Paris, however, are capitalizing on the newly found horsemeat fame by offering horse tartare.

The EuroPoint: We agree with Jose Manuel Barroso: “no system in the world can prevent people from taking illegal actions.” Yet what does this call for? More business friendliness, as Prime Minister Cameron contends, or effective food chain inspectors all across the EU?

Copyright © GSJ & Author(s)