Tesco has a horsemeat problem

Tesco has a horsemeat problem

Move over pink slime—a new meat scandal is in the making. The world’s third-largest retailer, U.K.-based Tesco, has been on the rebound in recent years trying to recover consumer faith in its private-label brand. But the efforts hit a s(nag) this week when the Food Safety Authority of Ireland found horse DNA in 37 percent of three products in the company’s Everyday Value beef line, a transparency gaffe that has turned into a PR nightmare for Tesco and others.

The Daily Mail reported that three other retailers—Asda, Co-op and Sainsbury’s—withdrew their burger lines as precautionary measures over similar concerns, and Burger King revealed that it employs the same beef supplier. Ireland-based Silvercrest Foods, a division of ABP Food Group, is the culprit that sold the tainted meats, and has since been ditched by Tesco.

All a matter of trust

“[The discovery] is damaging because people don’t want to think they’re eating horse and it brings into question the whole trust issue,” Conlumino research director Matt Piner told Bloomberg.“Retail trust is harder to build than throw away.”

Bingo. It’s not so much that eating horse is such a profound ethical misstep (it is, but hey, cows are people too, man). I’m sure there’s a time and a place for eating horsemeat—although, outside of desperately fighting off starvation on the frigid steppe after your wagon breaks down, I’m not sure when that is exactly. No, the rub here is that consumers just can’t trust cheap meat anymore.

The issue with pink slime wasn’t that it was unsafe or unsanitary. It was just gross, and nobody knew about it. It was an issue of trust—and if you can’t be trusted, you can’t be in business anymore. To wit, it wasn’t just horsemeat in Tesco’s beef—the Irish agency found that 85 percent of the products contained pig DNA too. People eat pig. But, at least in theory, they don’t eat pig when they order beef.

To be honest, the most surprising thing about this story is that Tesco’s stock price dropped only 1.7 percent in the immediate wake of the scandal, considering how the pink slime kerfuffle effectively shuttered Beef Products, Inc. To that end, this may be the last we ever hear of Silvercrest.

In a statement, Tesco promised to “find out exactly what happened and, when we do, we’ll come back and tell you” and that they would “work harder than ever with all our suppliers to make sure this never happens again.”

Perhaps in the United States, now that the Food Safety Modernization Act has kicked into gear, qualified suppliers will be more visible (same with unqualified suppliers) and such transparency issues will become a thing of the past. Perhaps.

Until then, make transparency a priority. The priority. It’s no longer just a selling point—it’s the cost of doing business.

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