Sarah Butler investigates the supply chain implications after horse DNA was found in burgers and ready meals sold by a number of retailers.  

Some supply chain management systems allow retailers to track meat products from the abattoir to the store

It started as an issue with one suspected supplier, became an industry-wide concern as the finger of suspicion pointed at remote European farms, and is now a political and economic problem as ministers and business leaders struggle to contain the horse meat crisis.

Tesco, Iceland, Aldi and FMCG supplier Findus have all found themselves embroiled at the centre of the row,selling horse meat despite having checks in place designed to test the quality of the food.

The scandal has raised crucial questions about the security of food supply chains and has prompted a wave of criticism of retailers and major food brands. The horse meat saga also highlights the difficulties in monitoring and securing a supply chain, even for cash-rich companies such as Tesco.

The top grocer had a plethora of controls in place to ensure the quality of its meat products, including regular audits and tests on the species of animal used, as well as approved sub-contractor lists backed by the British Retail Consortium’s accreditation. Tesco told the environment, food and rural affairs select committee that it carried out 22,000 specific tests a year covering 40% of its products for quality and adherence to strict product specifications. It had visited Silvercrest, part of the ABP group that produced burgers found to contain horse meat, three times last year to audit the company’s practices.

Yet the supplier somehow slipped through the net, apparently buying meat from an unapproved Polish supplier for as long as a year. Tesco’s technical director Tim Smith told the select committee: “It was impossible to check the supplier in Poland as we didn’t know it existed.”

Any supply chain relies on a certain amount of trust between all the parties involved and Silvercrest has lost its contract with Tesco and several other supermarkets after it was discovered to have used an unapproved supplier.

But the matter won’t end there. Trust in the entire European meat market is now under threat after it became clear the substitution of horse meat for beef has occurred at more than one supplier - including, it seems, some in the UK.

Authorities are now considering whether there has been some kind of international conspiracy and the Food Standards Agency is under pressure to sharpen up its oversight.Hilary Ross, a partner at law firm DWF who specialises in food and retail law, says: “If someone is determined to do something illegal, if they are good
at covering their tracks, that’s difficult to uncover.”

Transparent supply

Unpleasant surprises in the supply chain are nothing new - even Apple has been the subject of negative press when poor working conditions were discovered at a factory belonging to one of its suppliers, Foxconn, in China.

Experts say that one of the most effective guards against these unwanted discoveries is transparency.

Increasingly, retailers are working to ensure they have contact with every level of their supply base, well beyond first tier direct suppliers.

But Tom Smith, head of business development at Sedex the ethical supply chain support network, says this is not easy. “The further down the supply chain, the greater the risk of problems but the lower the influence a retailer has. The supplier might not even know they are supplying a particular retailer.”

Ross recommends retailers ensure every level of their supply chain is BRC-accredited. Still, many retailers caught up in the horse meat scandal believed they had such a system in place.

Another tool is a modern supply chain management system. Craig Sears-Black, UK managing director of IT provider Manhattan Associates, says there are systems that can track products from the original supplier via central and local distribution centres and on to individual stores. It’s possible to link a packet of sausages back to an individual carcass, and some retailers already monitor to that level of detail.

Keeping the supply chain simple is another answer - Dalton Philips, chief executive of Morrisons, which has so far managed to avoid becoming involved in the ruckus, has argued in the past that the supply chain has become “far too complex”.

In the case of Findus’ beef lasagne, which was found to be made almost entirely with horse meat in some cases, the meat is reported to have come from a factory in Luxembourg belonging to French food supplier Comigel. It reached there from Spanghero, a food plant in France, which apparently bought horse meat from Romania, although this is disputed by the Romanian Government.

In contrast, Morrisons has been largely insulated from the horse meat scandal because it sources the bulk of its own-label meat in the UK and processes it at its own network of abattoirs.

Until the FSA raided a slaughterhouse in West Yorkshire and a meat firm near Aberystwyth last week, it was assumed that buying British meant stronger controls on the supply chain.

While assurance schemes will boost confidence - the NFU-backed Red Tractor assurance label, for instance, guarantees meat has been tracked through its entire production process from the farm to packing and labelling - it seems UK suppliers are not isolated from the problem.

Risk assessment

Even if the UK had remained untouched, it would be tricky for all supermarkets and brands to source only in this country. But the recent string of revelations means retailers are considering radical new ideas.

Tesco, for example, is promising to carry out regular DNA tests on its meat products. It estimates the new regime could cost between £1m and £2m a year, with each test sample costing it about £450. Other grocers might follow suit. Already, Iceland has said it will change its processes to include tests for horse meat - before, it stuck to testing for contamination by other meats that were processed in the same factory, which is a common practice.

Ross says some retailers are “going out and testing everything at the moment,” but warns that’s not the answer.

“They will never be able to keep that up,” she believes.

She suggests retailers assess which areas are likely to be high risk and focus resources there. For grocers, meat, fish and some highly processed products are likely to be a priority.

Testing should be carried out by independent laboratories, and that should supplement any testing done by the supplier.

She adds that retailers should also ensure that there is an up-to-date legal contract in place.

Sharing information between retailers can also be useful. Organisations such as Sedex and the Ethical Trading
Initiative can help retailers keep tabs on suppliers by sharing information and tackling problems jointly. Sedex provides a database of audits on labour conditions in the supply chain and this can help companies keep costs down.

But relying on shared information can have its drawbacks.

Katherine Kirk, ethical trading director at fashion retailer Primark, says: “I agree with the principle of sharing information, which we do through the Better Work Programme, but the issue with other programmes and audits,
as we’ve lived and learned, is that if a supplier has paid for an audit it might not have as much detail as one we are paying for ourselves.”

Primark, which previously suffered exposés on alleged poor working practices in its supply chain, has dramatically stepped up monitoring of its suppliers since 2009 when it appointed Kirk. She has built up a
team of 30 staff working on ethical trade in Bangladesh, China, India and Turkey. They carry out factory audits
of all suppliers before Primark places an order.

Using its own team gives Primark faith in assessments and allows it to immediately tackle any problems.
Smith at Sedex says retailers need to engage fully with factories so that they understand what is expected of them and how full compliance can benefit their business.

Educating employees

Many retailers, such as Marks & Spencer, Primark and Tesco, are now funding programmes to educate workers about health and safety, workers’ rights and ways of working to help them contribute to improved conditions.

The ETI encourages engagement with trade unions or other workers’ groups that help monitor conditions in a factory directly. The workers are often the first to know when something is awry and ensuring they have a voice can reduce the need for audits and external intervention.

Inditex, the owner of Zara, is one retailer that is trying out this approach. It signed an international agreement with the International Textile, Garment and Leather Workers’ Federation in 2007 on workers rights. Recent reports also suggest China, which has always prevented UK-style unionisation, is looking at how empowering worker groups could prevent violent demonstrations by unhappy workers, of the kind seen at Apple supplier Foxconn.

Well-informed buyers are also an important part of securing a supply chain. Training can prevent overly demanding requests, such as unrealistic prices or orders that are too large, that lead to the use of unwanted and un-tested sub-contractors.

Richard Longthorp, chairman of Britain’s National Pig Association, said this week: “If you consistently buy something below the price at which it can be produced, you must know that corners have been cut in quality, or safety, or legality, or all three.”

It seems scrutiny by retailers is the only way to avoid supply chain surprises - it is a clear case of if you want something done properly, you’ll need to do it yourself. Scandals such as the horse meat saga dent shoppers’ trust, and the most suitable response is likely to be radical changes in the way things are done.

The crisis that keeps on running

16 JAN

An investigation by food safety officials was launched to discover how beefburgers contaminated with horse meat were sold in supermarkets including Tesco, Iceland and Aldi. Tesco and Iceland sold the burgers in the UK while Dunnes Stores, Lidl and Aldi sold the meat in Ireland, where the Food Safety Authority of Ireland (FSAI) discovered that the burgers contained horse meat DNA.

25 JAN

Tesco apologised and launched an urgent investigation after burgers that had been withdrawn from sale as a result of the horse meat scandal were sold to the public. Its own-brand Free From burgers were sold at its store in Cowley, Oxfordshire despite an alert warning at the checkout that “this product has been withdrawn from sale”. Although the burger was not found to include horse meat, the grocer had decided to withdraw the line of burgers as a precaution.

30 JAN

Tesco delisted the supplier at the heart of the horse meat controversy and it revealed that it will introduce DNA testing checks to “set a new standard”. Asda and the Co-op followed suit, ditching supplier Silvercrest following the discovery of horse meat DNA in beef burgers. The supplier used meat in its products that did not come from the list of approved suppliers Tesco had provided. Irish authorities said the horse DNA had come from a raw material product used by an unnamed Polish supplier.

8 FEB

The Food Standards Agency called for UK food manufacturers to test all processed beef products after a third-party French supplier alerted manufacturer Findus about concerns that its beef lasagne product contained between 60% and 100% horse meat, fanning the flames of the crisis further.

11 FEB

Retailers agreed to a new testing regime following weekend crisis talks and were braced for further revelations as the scandal grew rapidly across Europe. Retailers including Tesco and Sainsbury’s met Environment Secretary Owen Paterson on the Saturday.

12 FEB

The Food Standards Agency (FSA) and police raided a slaughterhouse in Todmorden, West Yorkshire, and a meat firm near Aberystwyth as the horse meat scandal implicated UK companies for the first time.

On the same day Waitrose said it had discovered pork DNA in beef meatballs.

15 FEB

UK supermarkets hit back at government criticism that they “remained silent” over the scandal. Iceland said that all of its own-brand beef products were free of horse meat, while results from the FSA tests gave The Co-op, Morrisons, Tesco and Sainsbury’s the all-clear.

18 FEB

The major grocers met with Environment Secretary Owen Paterson to thrash out a plan to restore consumer confidence.

The difficulty of testing meat

Tesco is to change the way that is tests its meat products

Tesco is to change the way that is tests its meat products

The horse meat scandal has brought to light serious breaches of ethical standards and potential fraud. But many retailers and suppliers have also been caught out by new technology.

Irish regulators used a relatively new test when they wanted to find out if horse meat had got into the food supply chain. The polymerase chain reaction test is able to pick up tiny amounts of DNA not previously detectable.

Grocery chain Iceland’s technical manager Trish Twohig told MPs at the environment, food and rural affairs select committee that the new tests could pick up contamination from products previously processed by a factory’s machinery, even after a deep clean.

Tim Smith of Tesco agreed. “What constitutes clean and hygienic doesn’t necessarily constitute ‘free from’ a particular DNA,” he said. More sensitive testing raises legal questions about incorrect labelling, while there are understandable religious concerns among Jews and Muslims about consumption of pork. Retailers and suppliers will need to work out a practical solution with religious and consumer groups, and it might be that pork or Halal meat have to be processed separately from other meats in future.

But discovering 0.1% equine DNA in a product, for example, does not mean that there is physical meat present. The test picks up molecular traces that might be close to impossible to avoid. The British Retail Consortium and others have called for the matter to be debated at EU level.

Europe previously agreed, for example, that foods with less than 0.9% of genetically modified elements detected would not need to be labelled as containing GM. It was agreed that below that level, tests were unreliable. A similar deal might be on the cards for meat DNA.