The weekend reports on Europol arrests in Spain and the breaking of a major scam in horsemeat processing brings back memories of the scandal that engulfed the Irish and the European meat industry at the beginning of 2013. Ultimately, it emerged that Ireland’s leading role in this was because it was the Food Safety Authority of Ireland that identified the issue of horsemeat being passed off as beef.

It was a pan-European problem that may not have been uncovered but for a targeted study by the FSAI that examined the authenticity of a number of beef burgers and meals, revealing they weren’t just beef, as it was supposed to be.

The big difference in the latest scandal is the fact that authorities across the eight EU countries involved in the investigation are dealing with the issue of unfit meat. In 2013 the issue was fraud which, although serious in itself, never constituted a risk to public health. It did, however, reveal a practice of meat trading that has now become extinct.

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Prior to the discovery of horsemeat in what was supposed to be beef, issues of quality concentrated on microbiological readings and making sure the product had satisfied all drug withdrawal periods including free from growth promoters which are illegal in Europe but not elsewhere in the world. The European beef industry didn’t have a futures market but it had a network of meat traders that bought containers of frozen beef from factories. These brokers were speculating on holding the product and intending to sell on a rising market. For the producing factory it was a way of cashing in frozen stocks, particularly at times of a sluggish market. Product was often traded between brokers in the way that third party cheques used to be passed on with just a signature on the back.

Unscrupulous elements

The 2013 scandal revealed just how little the industry, including large burger chains, ready meal producers and big supermarkets knew about the lower value meat products they were sourcing, particularly for their budget ranges. The incessant driving down of prices created the incentive for unscrupulous elements in the industry to blend even lower value product (horsemeat) with beef and when it was in a frozen 20kg block, it was unidentifiable without species testing – which did not happen.

It was only when the issues emerged at Silvercrest in Co Monaghan – the then ABP-owned burger manufacturer – that it was revealed just how little knowledge top retailers and burger outlets had of their supply lines.

This incident was the point at which the Irish meat industry completed its journey from one that specialised in harvesting EU market support mechanisms to being a quality-orientated business, with a particular focus on product integrity.

The traditional meat trading or broker service was effectively eliminated from the business as companies and customers focused on shortening their supply chains to minimise the risk of anything going wrong again.

Not only have traders been squeezed out, but so too have smaller standalone meat factories. Previously, these would have been substantial suppliers to the retail packing and burger manufacturing business of the big groups. However, we have now seen ABP take the Allen family’s share of Slaney and recently acquire half of Linden Foods in Northern Ireland. Dawn has taken over Dunbia’s Irish interests and are the majority partner in Dunbia’s UK business. Both these organisations have extensive retail packing and burger manufacturing capacity and the mergers and acquisitions further tighten their control of supplies.

This consolidation of the meat processing business may well have occurred anyway, but the long winding supply chain in manufacturing beef revealed by the horsemeat investigation no doubt hastened it. Farmers naturally are concerned about the diminishing competition among buyers for their stock, yet are powerless to prevent it. This was demonstrated by the EU competition authorities waving the ABP acquisition in Slaney through last year in the face of strong farmer opposition.

The biggest issue for farmers isn’t a wish that meat factories aren’t successful – in fact, farmer success depends on factory success. What is needed is a level of openness and transparency unheard of in the Irish meat processing industry, comparable to what is available in the US. The EU’s Unfair Trading Practices initiative may be the vehicle to deliver this, but it will take strong and effective lobbying to make sure it happens.