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Global meat scandal and its effect on the South African consumer

SA needs an agreed set of protocols on food testing and labelling.

Since the meat scandal hit the UK shores in January, retailers around the world have faced speculation about the products on their shelves.

A study run by researchers at Stellenbosch University, found that anything from soya, donkey, goat and water buffalo were found in up to 68% of the 139 minced meats, burger patties, deli meats, sausages and dried meats that were tested. This has caused outrage from consumers because labeling on the products is said to be misleading and incorrect.

It is not only small retailers and less-than-scrupulous manufacturers who have been hit by the scandal. The global flood of revelations about adulterated food has raised legitimate questions about food safety and the integrity of all that we eat.

Consumers around the world are up in arms as they feel they have been misled by retailers as to what exactly they are eating. Some of the world’s largest food brands have been caught up in this scandal, with many of themcoming out launching advertising campaigns emphasising sophisticated testing and quality-control facilities within all their products.

Suppliers, processors and retailers have rushed to apologise to their customers and pledged to make greater use of DNA testing of their products. However, in South Africa and elsewhere in the world, DNA testing can be a costly procedure. It is also nearly impossible to test every single product on every single shelf in South African supermarkets.

Due to the lengthy food supply chain it is almost impossible to trace the principals involved in the scandal.  DNA meat testing has been brought forward as a possible solution. However, this is a technical and specialised process that needs to be approached with caution because it is often neither practical nor cost-effective.

However, what South Africa needs is an agreed set of protocols on food testing and labelling to give consumers the assurance that what they are eating is what is advertised and mitigate any possible confusion.

The Department of Trade and Industry has proposed a plan to strengthen the labeling of meat products so that the ingredients (beef‚ donkey or water buffalo) are identified more precisely. The food supply chain has become so complex that it is much harder to monitor what goes into a product and how much of it.

The poor reputation that the meat scandal has left in the food industry is crippling for producers. Sales of certain meat products has dropped and many supermarkets have tried to distance themselves from the scandal.

In South Africa, supermarkets have worked for many years to gain a credible reputation and establish their meat products as being a cut above the rest. However, this scandal has changed many people’s perception, even though supermarkets may not directly be to blame for the entire meat scandal. Retailers’ effort to ensure integrity and trust has ensured DNA testing and continuous spot checking.

The United States has said that tainted food is the cause of 3 000 deaths each year and sickens 48-million people. This statistic alone places huge pressure on food manufacturers. The meat scandal has placed them in a situation that is almost beyond repair. At the beginning of March it was announced that sales of frozen hamburgers had fallen by 43% and frozen ready meals by 13% from levels before the scandal.

Food prices have been on the rise with maize prices rising over 35% since 2011. This has left lower income groups facing financial and nutritional turmoil. In South Africa, the lower class spends almost 70% of their income on food. The farmers’ strike was another factor that will influence the price of basic foods.

The economic crisis has also resulted in food price increases which put enormous pressure on suppliers to find cheaper ingredients, with the result of these irregularities in the food production sector. When the scandal hit South Africa it was suggested that a special tariff be implemented on all red meat products imported into the country. But South Africa has shortage of health inspectors, which means that this will possibly not happen.

If one is to properly address these irregularities with controls, food prices will increase higher than predicted, placing strain on inflation and further negative implications on the middle to lower class.

* This report was prepared by Saijil Singh, lead analyst, Coface South Africa, the international credit insurer

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