The horsemeat scandal has rocked the core of the food industry. Products have been mislabeled and the relationship of trust that exists between manufacturers, retailers and the consumer has been damaged.
Many theories have been posited as to the origins of the crisis: were lower meat prices to blame for ‘unscrupulous corner cutting’, was negligence at play, were supply chains too long to be manageable, did the EU’s ban on desinsewed meat have a part to play? All of these questions give an insight into the workings of the meat industry, and the truly global nature of the food sector. As reports of mislabeled fish products begin to surface, Dominic Watkins, food law expert at business law firm DWF, looks at the horsemeat scandal’s ‘aftermath’ and asks whether changes in the law are needed to prevent more crises.
Falling at the first hurdle?
When the horsemeat scandal first broke, the industry was shocked. All major food businesses had what they believed to be robust due diligence systems in place, to ensure that the ingredients they procured were as described and, as required by law, traceable. So how could product labeled as beef turn out to be or contain horse? As the story developed it became clear that there were two very different issues at play: incidental contamination likely explained by environmental or airborne contaminants, i.e. contaminants at levels lower than one per cent, and gross negligence or fraud, i.e. contaminants at levels higher than one per cent. The food industry had to consider how to deal with both.
Some context
The test results published by the Food Standards Agency (FSA) found 17 positive results from 5430 tests. Perhaps this statistic puts the scale of the issue into some context, reinforcing the FSA’s view that: “the contamination and adulteration of beef products […] has been limited to a relatively small number of products.” While this is true, even one product is too many. In light of the scandal, the FSA has recognized that its focus needs to be on those products grossly contaminated with more than 1 per cent horse, stating: “The agency believes that such levels of DNA indicate either gross negligence or deliberate substitution of one meat for another.” The FSA now needs to work with stakeholders, both domestically and further afield, to ensure that the level at which ‘contamination’ becomes ’gross contamination’ is clear and remains set at a sensible, achievable and maintainable level under good manufacturing practice.
Due diligence?
While most food businesses were convinced that supply chains and diligence checks were robust, an opinion that has so far been supported by published data, the litany of big name brands that became involved in the scandal gave all in the industry cause for concern. Every major player in the industry has clear contracts in place with their vendors. These documents should be able to prove that they have contracted to purchase beef (or a beef product), and, in most cases, the contract would set out detailed standards to be met by the beef and key performance indicators to be met by the supplier. If you have contracted with someone for the purchase of beef and you have received something else, whether you are the retailer, manufacturer or the consumer, you have been wronged. However, the situation is more complicated for the business that has its brand on the mislabeled food product – for those businesses more checks need to be in place. Most retailers and manufacturers expect suppliers to meet exacting standards, often requiring them to provide products only from certain farms or geographical locations, so as to ensure food safety and the highest quality standards. Additionally, there is a general expectation that suppliers are externally audited to a recognized standard, such as the BRC Standards. These checks are supplemented by the specific audits carried out by retailers themselves, which usually include product checks and unannounced site visits to ensure compliance. Unsurprisingly, the food industry believed such measures were sufficient to ensure that the product supplied was what had been specified. Perhaps in hindsight this was a mistake. However, if, originally, due diligence systems had been demonstrably implemented by retailers and manufacturers, it is very unlikely that either party will ever be convicted for any food law offences.
So what needs to change?
What’s now needed is clear pan-EU guidance, on the level at which good manufacturing practice cannot be expected to remove any more contaminants. The food industry has been working to levels of one per cent for some time, and that appears to be the appropriate range, but clear agreement needs to be reached. Similarly, agreement is needed on the appropriate methodology for and frequency of testing. This will set a clear standard for all to achieve. However, many have called for changes that go far beyond the above. Which? recently called for five heads of action: 1. More surveillance that is better coordinated 2. Tougher enforcement given greater priority 3. Tighter legislation 4. Measures to increase consumer awareness of food provenance 5. The return of food policymaking decisions to the FSA The ‘tighter legislation’ angle is one that successive governments have consistently taken if something within the industry has gone wrong. However, legislating is unnecessary: it is already unlawful to sell mis-described food, food not fit for human consumption, or food not of the nature, quality or substance demanded. There are offences that could be used to prosecute cases of misleading food labeling in at least four different legislative sources, and that is before one starts to consider more general criminal offences like fraud. There simply is no need for anything more – what we have is more than adequate and provides enforcers with a wide and varied toolkit to use. Which? calls for the food industry to regularly test its products and improve traceability, something that is already being done. It also calls for greater powers for the FSA, to enable it to require testing, gain access to premises and publish results. The Food Safety Act already gives officers power of entry greater than that of the Police, and allows them to take samples for testing. The only element of the Which? suggestion that is not already law is the power to compel businesses to carry out their own testing. This merely shifts the cost of testing from the tax payer to industry. To create further regulation would also be inconsistent with the Government’s policy on the removal of red tape and unnecessary legislation. It is pleasing to see that despite considerable pressure, it has chosen not to act. Food law is currently in the hands of the Department of Health, the Department for Environment, Food, and Rural Affairs (Defra) and the FSA. While there is some superficial logic to this approach, it makes it very difficult to manage a crisis like the horsemeat scandal, and even harder for businesses to obtain the advice they need. It seems sensible that food law should be controlled by one department. Which? calls for more food fraud surveillance and enforcement being given greater priority. Regulators already investigate food fraud, and the reality is that it is not possible, cost effective or proportionate for all products to be analysed, but ensuring that the programmes continue is an important vigilance step.
Winners and losers
With so much media coverage of the crisis at the time, a range of views developed as to who was at fault. An initial ICM poll suggested three quarters of consumers blamed suppliers rather than retailers, while a more recent Which? report found there has been a 24 per cent drop in consumer confidence in the grocery sector. ‘Buy British’ campaigners were quick to capitalize on consumers’ lack of trust in supermarkets and food manufacturers, and there has been some evidence of altered shopping habits as a result. Many local butchers have seen an increase in sales, with Which? reporting that 30 per cent of consumers are now buying less processed meat. How long consumers continue to behave differently – if in reality they are actually doing so – remains to be seen. The (FSA) is continuing to try to restore consumer confidence through its surveillance regime and the publication of robust testing data.
Be practical
Looking back on the scandal, it is very easy to say businesses should have ‘tested more’. The difficult question is how often? Every batch? Every week? At random? Given the mass of meat in the supply chain, the length of time needed for DNA testing to be carried out and the considerable cost associated with it, batch testing can never be proportionate to the risk. One has to remember that these tests are slow and some cost several hundred pounds a time. Cost is not a reason for shirking testing, but it is a reason for ensuring that the frequency of testing is proportionate to the risk posed to avoid the price of our meat rising. It is important, now more than ever, for regulators to set clear guidelines on how frequently testing should be carried out.
How do we ensure it doesn’t happen again?
Retailers and manufacturers need to keep up their due diligence measures: essentially continuing with the contaminant tests that were already ongoing before the scandal, but carrying them out to the agreed standard and frequency. The overwhelming majority of meat tested has been shown to be accurately labeled, and all meat has been described by the FSA as being safe. Once the FSA and the food industry have agreed the standard frequency of tests and the level at which good manufacturing practice cannot be expected to remove any more contaminants, manufacturers and retailers need to work to these levels. Can any measures put in place prevent fraud? A determined fraud will, by definition, find ways to defeat the protections in place, but, practically, this should be made as difficult as possible, and vigilance systems should make swift detection likely. Where there is gross negligence, or more likely in this case, fraud, the full force of the law should be brought against the perpetrators. Under such circumstances, other parties within the food supply chain are victims, from those who procured the meat, through to the retailers selling it and the consumer buying it.