Last week, Environment Secretary Owen Paterson said ‘too much is taken on trust’ in our meat industry, a statement that must have shaken us all to the core. Who then should we be pointing the finger at in this horsemeat drama – the producers, abattoirs, processors, brokers, retailers, or the Government’s Food Standards Agency? It’s a very long chain.
With supermarkets chopping and changing suppliers in pursuit of the lowest prices, the system has become particularly vulnerable to fraudulent activity
In 1960, according to the Institute of Grocery Distribution, small independent retailers had a 60% share of the food retail market. Now a handful of multinational corporations, namely Asda, Sainsbury’s, Tesco and Morrisons control 80% of the market. The good news is that ‘Bringing home the bacon: from trader mentalities to industrial policy’, a report published in June last year by the Centre for Research on Socio-Cultural Change (CRESC), concluded that good quality pork need not necessitate premium prices, even where sold by a retail giant like a supermarket. Their proposals could be applied to the whole of the meat industry.
The report acknowledged the power exerted by those at the top of the pig-to-pork food chain, explaining the damaging practices of Asda, Sainsbury’s and Tesco who rely on flexible short-term supply agreements that play suppliers off against one another, rather than using fixed contracts. This means low prices for consumers but results in producers and processors losing out.
Supply chain partnerships and vertical integration make regulation easier because they tighten up the supply chain
Arguably, with supermarkets chopping and changing suppliers in pursuit of the lowest prices, the system has become particularly vulnerable to fraudulent activity. The head of the Northern Ireland Food Standards Agency recently said that the difference in price between horsemeat (£700 a tonne) and beef (£3,000 a tonne) was a ‘major’ motivation for fraud. Unfeasibly narrow margins may incentivize those along the supply chain to substitute beef with horsemeat.
There are two tried-and-tested ways to tighten up the supply chain, which would make its regulation by the Food Standards Agency a little easier. One is the upmarket method employed by Waitrose and Marks & Spencer with retailers entering into ‘supply chain partnerships’ with farmers and processors, supported by higher pricing. But the other is Morrisons’ ‘vertical integration’ model, premised on its ownership of all or most parts of the supply chain. The CRESC report argues that this ensures a highly efficient use of all parts of the carcass and minimises waste. Such efficiency enables Morrisons to compete with Asda, Sainsbury and Tesco.
The Soil Association have proven themselves to be well ahead of the curve with their Catering Mark’s focus on food traceability
It’s perhaps no coincidence that Morrisons and Marks and Spencer also source most of their fresh meat from within spitting distance of where it is sold- from British farmers. Waitrose source all of their fresh meat from within the UK except for out of season lamb and some of their turkey. This must surely facilitate oversight of operations.
As well as supporting British agriculture, sourcing meat from UK farmers may also protect us from changes in the global food market. The expanding middle classes in China, Brazil, Indonesia and India have made producers realise they no longer have to deal with aggressive British supermarkets because they are getting better prices for their produce elsewhere.
But we don’t, of course, only consume food bought in retail outlets (and restaurants). At least with what we buy from our nearest supermarket, we can check the label and vote with our feet if we’re unconvinced – business has boomed for butchers across the UK since the horsemeat story broke – but what of the meals we’re served in schools, hospitals, prisons? Some of these public institutions have also admitted to unwittingly serving horsemeat.
The Soil Association’s Food for Life Catering Mark is the UK’s only independent accreditation scheme setting standards of traceability, quality and provenance for public sector meals by shortening supply chains with its emphasis on locally-sourced food. It says in many cases their standards can be met within existing budgets ‘or have even reduced costs’.
The Soil Association have proven themselves to be well ahead of the curve; their concern with tightening up food traceability has been well-placed.
Shortening the food supply chain might also have the benefit of reconnecting us with our food’s provenance. In the same month ‘Bringing back the bacon’ was published, a survey conducted by the charity LEAF (Linking Environment and Farming) found that more than a third of 16 to 23-year-olds (36%) did not know bacon comes from pigs. Forty percent also failed to link milk with dairy cows.
Rigorous food traceability is vital if we want to be in control of what we are putting into our bodies. Supply chain partnerships and vertical integration make regulation easier because they tighten up the supply chain. This also improves efficiency, reducing financial and environmental costs and often favours British farmers, boosting the UK agriculture sector. Let’s hope the horsemeat fiasco precipitates a much-needed shake-up to our food system.
This article was first published by Think Base on 19th February 2013.