Ireland’s role in horsemeat scandal boosts its image

Ireland’s role in identifying horse in beef products has boosted its image

A poster at the Ikea store in Ballymun in February showing the meatballs which were removed from its menu. Photograph: Bryan O’Brien

A poster at the Ikea store in Ballymun in February showing the meatballs which were removed from its menu. Photograph: Bryan O’Brien

Tue, Jan 14, 2014, 01:00

Media reports on January 15th, 2013, that beef burgers being sold by retailers such as Aldi and Tesco contained horse got immediate global attention.

In the following weeks Burger King announced it was no longer buying burgers from Co Monaghan-based Silvercrest Foods, concerns were raised by Findus about its beef lasagne, and Nestle said it had discovered traces of horse in food products it was selling in French, Italian and Spanish supermarkets.

As news emerged of horsemeat that was labelled as beef travelling from Poland to Ireland via the UK before being made into frozen burgers, consumers’ trust in some of the world’s major food and retail brands took a battering.

In February, Czech authorities discovered horsemeat in Swedish meatballs produced for the furniture giant Ikea and labelled as beef and pork. The company withdrew the popular product from sale in countries across Europe, including Ireland, for almost a month, before reintroducing the item having established a tighter supply chain for its ingredients.

Frozen burgers
According to David Berry of Kandar Worldpanel, which monitors the retail sector, sales of frozen burgers by Irish multiples fell sharply after the scandal. In the four weeks ending February 17th, sales fell 42 per cent. However they have since recovered much ground.

“There has been a long-term impact, with levels not back to where they were. The hardest hit are the own-brand burgers.”

He says the impact extended beyond burgers to other areas of the frozen food sector, such as pizzas, as well as into the chilled convenience foods sector. “Overall there has been a shift to fresh products.”

Yet, one year on, the commercial impact on the companies affected looks minimal, while the impact of the scandal on business practices and consumer attitudes is just one contributor to a constantly altering landscape where shoppers are constantly seeking value while demanding quality.

The scandal began when the Food Safety Authority of Ireland published data showing frozen burgers containing horsemeat were on sale in Irish outlets of Tesco, Dunnes Stores, Aldi, Lidl and Iceland supermarket chains. While the levels of horse were low in most of these outlets, the level in the Tesco burgers was 29 per cent.

The value of Tesco’s shares on the London Stock Exchange dropped as investors fretted that the scandal would so damage the retailers’ image it would have a significant impact on profitability. However the investors were wrong to be concerned, and figures released in June showed the scandal had only a “small but discernible impact” on its frozen and chilled convenience food sales.

Likewise with Greencore, an Irish convenience food company quoted on the London Stock Exchange and headed by Patrick Coveney, brother of Minister for Agriculture Simon Coveney. Greencore’s shares fell by 20 per cent in February 2013 after it was announced it supplied a beef bolognese sauce withdrawn by Asda on the grounds that it contained horse.

Greencore said it had bought the meat from a Larry Goodman ABP plant in Nenagh, Co Tipperary, but ABP said it was not the source of the horse. Tests a fortnight later showed the initial scare was ill-founded.