Horse meat scandal will mean higher meat prices: Tesco


Philip Clarke

The horse meat scandal would seem to have done enough damage - but it's not finished yet. There's a good chance that it will push up the price of all meat on the supermarket shelves.

But why do we have to pay for failures in the industry, and is it fair we should pay more?


The news came in a presentation by Tesco Chief Executive, Philip Clarke, to the annual conference of the National Farmers' Union.

In it he admitted that scandals like this one: "can cause immense damage to trust in our industry." He said that a new testing regime would be introduced by the supermarket - at a cost of £2 million a year. He said that customers would not bear the brunt of the cost of testing - the supermarket would lose a bit of its margin instead.

He also announced a change to the way the supermarket sources its meat - bringing more of it closer to home, and with fewer organisations involved in the chain from the animal to the shelves. He blamed previous complexity for the scandal, saying: "Over many years, the way retailers source food has been allowed to become too complex. What this complexity in the supply chain has also done is to leave it open to exploitation by rogue elements operating in the industry."

Buying British

He committed to buying British. This was also communicated to shoppers in an email to everyone who has registered their address with the store.

In it Clarke says: "You've told us that you want to buy British. And that the journey from farm to fork should be far less complicated. I've listened to what you have said... Today I make you a promise. Tesco is going to bring the food we sell closer to home."

He said that already the store's beef - fresh, frozen and in ready meals - comes from the UK and the Republic of Ireland, but that from July all chicken will be from the British Isles.

He also announced a new website, where the supermarket will keep customers informed of its progress. It also has details of all the products that have been tested, those that have been withdrawn, and those that have been cleared.

The cost

However, all of this comes at a cost. He told the conference: "I hope that it doesn't mean price increases, but I can't stand here today and tell you that it won't."

New supply chains, buying more British meat, a new agriculture director, and a new website dedicated to telling consumers about the supply chain in a variety of media: they are all going cost a small fortune.

The supermarket didn't become the country's biggest, with massive profits, by doing this sort of thing entirely out of its own margins. The cost of doing business will go up, and we can expect to see this reflected in the price we see on the shelves.

Is this fair?

On the one hand it feels as though we are paying double for the mistakes of the industry. However, there's another view. You could argue that these higher prices are what we should have been paying all along. The EC says that beef prices have risen over 45% in Europe in the last five years. However, the cost of beef products has kept roughly in line with food inflation of 4%.

If we had been willing to pay a fraction more we never would have become dependent on mechanically reclaimed meat to keep costs down. If we weren't leaning on that manufacturing process we wouldn't have been so wrong-footed when legislators decided we couldn't call it meat any more, and we wouldn't have been out and about in a global market hunting for the lowest cost meat and living with the consequences.

There's an argument that if we cannot afford meat, we should have some days without it, and value the days when we can. We should eat good quality - and expect to pay for it - and make ends meet by having the odd pasta, pizza or risotto day.

It wouldn't hurt our health either. A study by Cambridge University Institute of Public Health found that halving our meat intake would lead to thousands fewer cases of heart disease, diabetes and cancer.

But what do you think? Are higher meat prices a cause for concern, or the price of having ethics? Let us know in the comments.

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