the real reason for the horsemeat scandal

the real reason for the horsemeat scandal

As I'm writing this the horsemeat scandal continues to roll on. More and more companies are being implicated and whereas at the beginning of the scandal it was confined to just a few meat products from a single producer in Ireland, it now seems to encapsulate a huge and growing percentage of the processed food industry.

It emerged that food at schools and hospitals is involved - which raises the separate question about the quality of food being served in these places, where nutrition should be of prime importance.

There's lots of finger pointing going on, this article in the Guardian highlights the farce of it all. The supply chain for the (contaminated) Findus products goes from Luxembourg to France, from France to Cyprus, from Cyprus to the Netherlands and from the Netherlands to Romania. With a supply chain that long, encompassing so many countries across Europe, it should not be a surprise that there are problems with quality control and confusion over food sources. It's just one example of how fundamentally flawed our current food system is.

And with everyone blaming each other it's easy to be distracted from the real reason why we have this problem. There are deeper and more fundamental issues that need tackling if we are going to prevent these kinds of fiascos in the future. The biggest reason is the increasing demands put upon producers by supermarkets.

under pressure

In the current system there's a lot of pressure put on farmers and producers to produce cheap food to supply the supermarkets. This became obvious in the summer with the dairy industry. We learned that dairy farmers are now forced to sell their milk for less than they can produce it whilst the supermarkets make a healthy profit from the sales of dairy foods. It would seem logical in this situation that producers might look to cut corners to save money so that they can make a living. And if British producers can't supply meat and dairy cheaply enough then the supermarkets might look abroad to countries with lower food standards in order to retain their high profit margins.

money, money, money

We are in a tough situation economically and this is taking its toll in many ways. Since the recession many people need to save money due in large part to an extortionate rise in energy costs, inflation, unemployment, petrol costs and more all pushing up the cost of food.

So what is a family to do? When uncontrollable expenses rise, many people look to save money in areas they can control - their food shop. People are demanding cheaper food, but the problem is cheap food comes at a great cost.

It would be easy to say that this is to blame for the pressure put on farmers and producers to produce cheap food and that the supermarkets are merely adapting to consumer demand for low prices. But this is to (conveniently?) forget some very important facts.

big bucks

Last year Tesco had half-year profits of over£1 billion, Asda had profits of£857 million in 2011, Sainsbury's had half-year profits of£405 million, Morrison had half-year profits of£445 million whilst Waitrose had the highest operating margin at 5.4%.

These are HUGE profits. So the supermarkets aren't suffering, despite what some financial commentators might say. Why can't they pass on some of their profits to the consumer? Why do our supermarkets need to make such huge profits? Supermarkets, like the other corporations providing consumer goods in our current system, are at the mercy of shareholders who have become used to year on year increasing returns on investment. The horsemeat scandal is simply the latest indicator that this system is not sustainable.

If supermarkets were prepared to pay a fair price to producers, reduce their profit margin and offer goods at a fair price to consumers, consumers would be able to afford better quality food. But I am not saying all of the responsibility is at the doors of the supermarket. As a nation we do need to look at our shopping habits - it's interesting to consider that the UK (8.9%), Ireland (7.5%) and the US (6.8%) spend the least amount on food, as a percentage of household income, compared to any other country in the world! As a comparison in France and Spain they spend 13.4% of household income on food. This suggests that culturally, British, Irish and Americans consider food less important than some parts of Europe where standards of living are comparable both in terms of quality and cost..

Many people are having to reduce the amount they can spend on their food, that's a fact. But we can save money in ways other than always going for the cheapest option, as Surinder discusses in her video Eating Well on a Budget.

But how does all this relate to the horsemeat scandal?

Well in a system where the producer and farmer is under more and more pressure to supply food for less and less, some producers will look for cheaper ways, even if it means breaking the law. It's not just the dairy industry that is struggling to make a profit.

And whilst I agree that the supermarkets need to drop the producers who have been caught using horsemeat, I think it's very convenient for them just to push the blame onto the producers and absolve themselves of responsibility in the process.

responsibilities

This situation would not have come about if the supermarkets decided that profits don't always have to come first and that their moral and social responsibility is more important than profit. But then our current economic system is based upon the theory of Milton Friedman who said that a company's only responsibility is to make a profit. Period.

Their relentless pursuit of profit, in part driven by shareholder pressure, has led to an unsustainable, unhealthy food system, where a real catastrophe is just waiting to happen. This time it might be horsemeat and (let's not forget) pork that has been found in the food, but who's to say next time it won't be worse? Did we not learn anything from the Mad Cow Disease outbreak of the 90s?

And this all leads us to the other reason for the horsemeat scandal - the de-regulation of the food system. Deregulation has been a prominent political theory of the last 30 years, starting with Reagan and Thatcher in the 80s. It is thought that less government is better government. The problem is that industries end up governing themselves - and given that the system demands that the industry produce profits year on year - that must be a recipe for disaster. The recent financial collapse should be enough to teach us that deregulation doesn't work.

Back in 2010 Professor Tim Lang of City University warned against weakening the Food Standards Agency (FSA) but this hasn't stopped our government reducing its spend on the regulation of food - they plan to further decrease the budget for both the FSA and the Trading Standards Institute over the next two years.

symptom not disease

Ultimately, we have to look at the horsemeat scandal as a symptom of an ailing food system. As in our video Disease is a Process we need to look at what the underlying issues are here and not just look for a temporary fix. The companies and people involved need to be brought to justice, but that's not going to solve anything. Because they are not the problem - the system is the problem.

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