DAMAGE LIMITATION:THE DISCOVERY of potentially dangerous contaminants in a very small section of the national cattle herd presents a formidable challenge to the beef industry as it threatens to erode confidence in the safety of all Irish beef products.
This is something of a nightmare scenario for the wider food industry, whose international success rests on Ireland’s reputation as a reliable and safe source of quality product.
Already reeling from the recall of all pork products and the loss of 1,800 jobs within two days, the sector now faces a battle on a second front to maintain confidence in Irish beef at home and abroad.
Although cattle in about 45 farms may have been exposed to the same contaminated meal that sparked the crisis in the pork industry, tests on three of the 11 beef farms examined so far show that the level of potentially dangerous dioxins exceeds the proposed maximum legal limit.
Both the Government and the Food Safety Authority of Ireland have stressed that the contamination levels were “significantly lower” than in the pork sector and represent an “extremely low risk” to public health.
Animals from affected farms will not be released to the market, but there is no recall of Irish beef.
Accordingly, there is considerable relief within the beef industry and the farming community.
Yet if public health and the viability of the food industry at large rest on the safety of food supplies, the perception of safety is equally important.
Doubly so in the case of the Irish beef industry which exports more than 85 per cent of total annual production and which commands high prices in the prosperous European markets it targets.
In the immediate aftermath of yesterday’s announcement by Minister for Agriculture Brendan Smith, beef producers and the agencies that support them snapped into action in an effort to reassure their wholesale customers throughout Britain and on the Continent about the quality of the product.
They must still await the verdict of consumers.
Nevertheless, the fact that there is no recall is likely to dim the impact of the contamination story, at least for the moment.
Chief of Bord Bia Aidan Cotter said yesterday that there had been no adverse response to the discovery of beef contamination from any of the 70 major supermarket groups in the network of retailers with which it engages in promotional activity.
He said a reduction in the price that Irish beef could realise was possible, depending on the level and tone of media coverage and consumer response to it.
The irony here is that the price of Irish beef has risen 18 per cent this year in international markets, thanks in the main to the partial EU ban on Brazilian imports.
That the EU ban followed a campaign by the Irish Farmers’ Association neatly shows how food producers in foreign markets can exploit any difficulty faced by their rivals.
And consumers respond to food scares. It it widely accepted that almost 10 years passed after the British BSE outbreak in 1996 before beef consumption fully recovered.
While the foot-and-mouth (FMD) epidemic and a European BSE crisis of 2001 damaged consumer confidence in beef in the interim, Ireland’s industry actually became a beneficiary of the FMD crisis.
Heavily dependent in previous times on export refund trade with Middle Eastern states and Russia, the sector thrived as the British industry went into meltdown and it redoubled efforts to win business in the profitable markets of Britain, Italy, France, the Netherlands and Scandinavia.
Needless to say, rival beef industries would not stand by while Ireland sought to put its house in order if the contamination uncovered yesterday erupted into something bigger.
Hence the immediate efforts yesterday to contain the problem.
There was no comment from Larry Goodman’s Irish Food Processors on the fight to maintain confidence in Irish beef.
As the largest processor in Ireland – and indeed Europe – the company is likely to be moving quickly to ensure that there is no erosion to its business.
The same must be true of Dawn Meats and Kepak, who, with Mr Goodman’s company, command more than half the Irish beef market.
Even if there is no further deterioration in the situation, the stakes are pretty high.
Beef output at producer prices was last year valued by the Central Statistics Office at €1.5 billion. Annual retail sales of beef in Ireland were valued at €463 million at consumer prices; and Irish beef exports were valued at €1.57 billion in 2007 at factory and manufacturers’ prices.
Some 113,000 farmers have cattle, of which 69,000 are classified as specialist beef producers.
An additional 7,000 people are employed directly in the beef processing sector and a similar number are employed indirectly in associated industries.
In a shrinking economy, any threat to the industry could have dire consequences.
With the pigmeat industry already on its knees due to contamination from one meal plant, the sales pitch is more difficult now.