Final Supply Chain Horse Meat

download Final Supply Chain Horse Meat

of 15

Transcript of Final Supply Chain Horse Meat

  • 8/10/2019 Final Supply Chain Horse Meat

    1/15

    BZU Sahiwal

    Submitted to: Mr. Ali Razad

    Submitted by: Faisal Shehzad

    Roll No: MBSE-12-20

    Class: MBA (Eve) 6th

    [HORSE MEAT SCANDAL]At starting of 2013 a scandal has highlighted by the food standard authority of Ireland which shows that

    frozen beef burger that are selling on retailer store has adulterated with horse meat.

  • 8/10/2019 Final Supply Chain Horse Meat

    2/15

    ACKNOWLEDGEMENTS

    This fabulous work would not have been possible without the guidance and the

    help of several individuals who in one way or another contributed and extended

    their valuable assistance in the preparation and completion of this business plan.

    First and foremost, our most gratitude to Sir Ali Razaq and whose sincerity

    and encouragement we will never forget.

    We offer our regards and blessings to all of those who supported us in any respect

    during the completion of this Research Report.

    Last but not the least, our families and the one above all of us, the omnipresent

    Allah, for answering our prayers for giving us the strength to plod on despite our

    constitution wanting to give up and throw in the towel.

  • 8/10/2019 Final Supply Chain Horse Meat

    3/15

    Table of Contents

    Executive Summary ....................................................................................................................................... 4

    Introduction .................................................................................................................................................. 5

    Literature review ........................................................................................................................................... 6

    Food supply chain of beef products .......................................................................................................... 6

    The Companies Involved in Horse meat Scandal ...................................................................................... 6

    Source of meat in Tesco: ........................................................................................................................... 9

    The ABP and Comigel Connections: .......................................................................................................... 9

    Reputational Damages to the Food Industry: ......................................................................................... 10

    Important News Summary: ......................................................................................................................... 11

    (Brussels, 2014) ...................................................................................................................................... 11

    (Horse meat Impact on frozen food Sale , 2013) .................................................................................... 11

    (Uk Horse Meat Scandal, 2013) .............................................................................................................. 12

    Conclusion: .................................................................................................................................................. 13

    Recommendation:....................................................................................................................................... 14

    Bibliography ................................................................................................................................................ 15

  • 8/10/2019 Final Supply Chain Horse Meat

    4/15

    4

    Executive Summary

    In Feb 2013 a customer violation has surrounded the western world in sense of company

    adulterate horse meat to beef product in number of countries from frozen meals that is highly

    served in school, universities, offices, home without the awareness of the consumers. This meat

    corruption became a highly talkative phenomenon of that year. Due to this horse meat

    adulteration it actually directly impact on the faith of customer and disobey the religious of

    customer.

    Europe countries are highly integrated with each other so thats why the food supply chain of

    Europe is also highly connected and make a vicious circle that started from order and completed

    on order fulfillment. The European supply chain move around some countries like United

    Kingdom, France, Cyprus, Netherlands and Romania and at the end again reached in United

    Kingdom. The horse meat scandal has been happened Due to this highly complicated food

    supply chain of Europe.

    When horse meat scandal is happened no one know exact which company is liable for this

    scandal even that is it fault of retailer or supplier or manufacturer but when investigation has

    started a number of companies are involve in this scandal. The most convicted companies are

    Silvercrest food; Liffey meats, Comigel, ABP, and LJ potter, Draap trading Ltd and Spanghero.

    The horse meat scandal hardly destructs Tesco retailing business. The early day mostly people

    thought it all adulterated by the Tesco but after that Tesco withdrew al their product from super

    markets. The Tesco scientists executed test and found up to 60% horse meat in their product.

    They initially shocked and said it was critical breach of trust and it caused only due to sloppy

    supplier who were involved to making high profit.

    This scandal imposes a negative impact on consumer as well as on food industry peoples trust

    on food industry and food controlling agencies is greatly disturbed. After that scandal the Europe

    frozen meat demand has declined 11% as compare to 2012.

  • 8/10/2019 Final Supply Chain Horse Meat

    5/15

    Introduction

    In early 2013, a moment of consumer violation has extended the Western world in term of

    company adding horse meat to beef products in multiple countries from frozen meals that is

    served in school canteens, without the awareness of the consumers. This issue of meat corruption

    by most people known as the Horse Meat Scandal Horse meat scandalhas had not only direct

    impact on the meat industry, but the impression of consumer faith in products offered by

    companies was put out of balance as a result of its secondary effects. Decrease in consumer faith

    is closely related to ethical, legal, health and in some cases religious issues that Horse Meat

    Scandal brought about. (LenkaHudakovo, 2013)

    The first case of meat corruption happened on January 15th

    2013, when the testing of selected

    beef products presented by major retail companies in United Kingdom (UK) and Ireland exposed

    shocking news. The food Safety Authority of Ireland tested a kind of frozen beef burgers

    from supermarkets for the appearance of DNA from other species which were unexposed. It

    contains horse DNA in over one-third of the beef burger samples, and pig in 85% of them. The

    majority of the beef ready meals also had pig DNA but not horse. One beef burger sample from

    Tesco has contained 29% horse meat other than beef.

    On 15 January the Irish and UK supermarket supply chains are highly united. FSAI says it warn

    the UK Food Standards Agency in November since what was on sale in Ireland would also be on

    sale in the UK; the FSA told MPs that it only found out in January. No one knows how long the

    contamination has gone on. (Lawrence, 2013)

  • 8/10/2019 Final Supply Chain Horse Meat

    6/15

    Literature review

    Food supply chain of beef productsThe Food supply chain of Europe is highly integrated. Firstly Comigel in Metz northern France

    take order meat from Spanghero in southern France when Spanghero received contract then

    further give it contract to a subcontractor in Cyprus so after that Cypriot subcontractor give that

    contract to a trader in Netherlands.

    The Dutch trader is further contracts with abattoir and butcher in Romania. The Romania skips

    the other trader or subcontractors and directly supplies meat to Spanghero in southern France.

    When Spanghero received the meat and send to Tavola a subsidiary of Comigel in Luxembourg

    and finally product go to Findus and retailers in UK and across Europe. So that is the whole meat

    supply chain of Europe. (Paris, 2013)

    The Companies Involved in Horse meat Scandal1. Mcadam food product

    charged by ABP food group for selling them

    polish meat in good faith

    8.Peter boddy licensed slaughter house

    Raided by police and FSA on the 12 feb, all

    meat was seized and operation suspended. The

    FSA believe that meat products purporting to

    be beef for kebabs and burgers were sold to

  • 8/10/2019 Final Supply Chain Horse Meat

    7/15

    farm box meatltd in aberyswyth, when they

    were in fact horse.

    2. Rangeland food

    Was suspended after the Irish department of

    agriculture confirmed that 75% equine DNA

    was found in raw Elements.

    9.Farmbox meats Ltd

    Raided by police and the FSA on the 12 feb, all

    meat was seized and operations suspended.

    The FSA are investigating pete boddy licensed

    slaughter house in the belief that product

    thought to be beef were sold to farm box meats

    when they were actually horse

    3.

    Silvercrest Food

    Found to be supplying beef burgers having

    evidence of horse DNA to super market by the

    food safety authority of Ireland.

    10.LJ potter oartners stillmans

    Six of the eight horses slaughtered in the UK

    have been found to contain traces of bute. They

    were then sent to France and may have entered

    the food chain.

    4. Dalepak

    One of the plants named by the food safetyauthority of Ireland as having supplied beef

    burgers to retailers that having evidence of

    horse and pig DNA

    11.High peak meat exports ltd

    Two horses slaughtered at high peak meatexports ltd were found to have traces of bute in

    the FSAs recent testing, but the meat did not

    leave the slaughter house.

    5. Liffey meats

    Also found to be supplying product to

    supermarket with traces of horse DNA

    12.Draap trading Ltd Belgium

    Jan fesen, a director of draap trading LTD is at

    the centre of investigations into how horsemeat

    entered the European food chain. The Dutch

    trader confirmed the bought a consignment of

    horsemeat from two Romanian abattoirs and

    sold it to French food processors and has

    insisted he had clearly labeled it as horse.

  • 8/10/2019 Final Supply Chain Horse Meat

    8/15

    6. Comigel

    Findus withdrew their beef lasagna products

    after its fresh supplier, Comigel, raised

    concerns about the type of meat used in the

    lasagna. The Findus UK beef lasagnas were

    found to contain up to 100% horse meat. The

    French company also supplied to Aldi.

    13.Spanghero, France

    One of the companies delivered meat by draap

    trading Ltd which then supplied the meat to

    Comigel. Spanghero insisted the meat arrived

    labeled beef originating in EU.

    7. Freeza meats

    Frozen meat at the freeza meats company was

    found to contain 80% horse meat. It is

    potentially linked to the Silvercrest factory in

    the Ireland

    14. Doly com and Carmolimp, Romanian

    Slaughterhouse

    The Slaughterhouses that are believed to have

    supplied horsemeat to draap. They have

    insisted the horsemeat sent to Holland was

    properly labeled.

    (Horse meat scandal essential Guide, 2013)

  • 8/10/2019 Final Supply Chain Horse Meat

    9/15

    Source of meat in Tesco:

    Over the period of the past few weeks Tesco has executed tests to see what was in their products

    only to find out that there was horse meat in the Beef burgers. Tests were ordered after the

    French company Comigel withdrew all their products from supermarkets raising interest about

    what was in their meat. Since Tesco meat comes from the same factory, the Tesco scientists

    executed tests. The Burgers were found to having up to 60% in most cases, but some up to 100%

    Horse meat DNA. The burgers were made in a French Factory where horse got adulterer with

    Beef.

    Publicly remarking for the first time since the food crisis were blow up six weeks ago. He

    initiated that he had been left shocked and practicable by discourse. He also said that the

    scandal was huge than anyone imagined and that it was a critical breach of trust between

    Tesco and its customers. He also said that it was caused by careless suppliers who were

    cutting corners for their own profit. He also hadno idea that they were presenting a third party.

    Since most of the meat comes from abroad the boss vowed to bring meat production Closer to

    home and get meat from British Farmers. (Casril, 2013)

    The ABP and Comigel Connections:

    The traces of the French manufacturing scandal have taken a different path to the Irish/British

    one so far. Comigel made subcontracted for ready meal production to a factory situated in

    Luxembourg Tavola. It was supplied with meat by a company named Spanghero. Spanghero had

    bought meat from a Dutch trader who has already convicted of mixing horsemeat as beef.

    The Dutch trader ran a company called Draap, which indicated backwards is paard or Dutch for

    horse. It was registered in Cyprus in 2008 with an offshore vehicle in the British Virgin Islands.

    It come out during Fasen's traces in Holland that he had supplied French companies with

    horsemeat got from South America and Mexico fraudulently labeled as Dutch and German beef

    going back to 2007.

    The horsemeat found in the contemporary tests on ready meals exported from France was said to

    have been received by Draap from Romania. The Romanian government has said its meat was

    legally exported accurately labeled as horse. The French government said Spanghero was the

    first agent to approve the horse meat as beef. Spanghero has refused doing so intentionally.

  • 8/10/2019 Final Supply Chain Horse Meat

    10/15

    1

    Fasen says Spanghero and French manufacturers were in cheating from the Starting. (Fasen,

    2013)

    Reputational Damages to the Food Industry:

    The latest announcement was a "massive wake-up call" to the food sector on both sides of the

    Irish border. He said that the problem was a loss of consumer trust and faith not a food safety

    action. However he stated the scandal would not help local the industry's struggles to sell

    products anywhere or Stormont's efforts to promote Northern Ireland's agri-food sector to Asian

    markets."Our food products not only beef but all our agriculture is sold on the timbers of safety

    and quality and here we have a big action about the quality of what we are selling". The ongoing

    Exploration into the adulteration would be "Accurate" but added he had "a Detail problem" with

    food labeling at present.

    If it says on a label that it is a product of Ireland or it is a product of the United Kingdom, we all

    should presume to say that is where 100% of the material comes from. The fact that there has

    been material imported from other countries and added to local produce to go into further

    processing is very discouraging. The meat business group is very important part of the domestic

    economy so any danger to the supply chain must be taken very seriously. (Belfast, 2013)

  • 8/10/2019 Final Supply Chain Horse Meat

    11/15

    1

    Important News Summary:

    (Brussels, 2014)

    According to Dutch food authorities have announced an official relocate for up to 11,000 kilos

    (24,000lb) of horse meat that was illegally sold as beef in Holland last year. The horse meat

    came from 200 slaughtered animals conception in equestrian riding club. Pharmaceutical

    laboratories and private owners in France are action the food chain at the height of an

    international scandal in 2013. Included in the deception was meat from dozens of horses that

    were exercised by a French pharmaceutical company. The meat was unfit for human usage and

    completed by fake documents labeling it as beef and it was delivered to five Dutch companies

    via Belgium between January and October last year.

    They arrested 21 cattle traders, butchers and veterinarians on Oct 2013 in France on doubt ofillegally selling the horse meat. Some of the meat has been identified but most has almost

    absolutely been eaten by consumers although it affects little hazard to human health.

    Dutch food inspectors said that the scandal first came out exactly one year ago when horse

    DNA was discover in frozen burgers sold in Irish and British supermarkets after injecting the

    food chain via a highly difficult international fraud connecting traders and abattoirs from

    Romania to the Belgium and the Netherlands.

    British MPs said that on 14 Jan 2013 Retailers still need to work on shorter supply chains. By

    buying domestic we can more likely trace all sources of our food.

    (Horse meat Impact on frozen food Sale , 2013)

    This graph shows the changing of UK meat sales from 2012 to 2013. This graph is presented

    after the horse meat scandal and we can see clearly how a huge change been happened in Frozen

    beef and fresh beef. After this incident people left frozen beef and moved toward fresh beef and

    frozen beef was declining 11% and Fresh Beef increasing 3%. So that change was happening due

    to horse meat scandal and it destroy the market of frozen beef products.

  • 8/10/2019 Final Supply Chain Horse Meat

    12/15

    1

    (Uk Horse Meat Scandal, 2013)

    In the UK, action has taken place at Peter Boddy Licensed Slaughterhouse in Todmorden, West

    Yorkshire and Farmbox Meats Ltd near Aberyswyth by Food Standard Authorities officially

    advocated by police. Police also arrested three men on distrust of offences under the Fraud Act.

    They have been bailed and all refuse any wrongdoing.

    In France, Findus says it has been the convict of mislead and will take action in the courts

    accusing French supplier Spanghero of intentionally selling horsemeat labeled as beef.Spanghero refuses the claim and says it is a convict of its Romanian supplier but when French

    officials for the time being suspended Spanghero's license they said the Romanian firm had

    performed in good faith.

    Dutchofficials have raided a meat processing plant supposed of mislabeling of beef.

    Northern Irelandand the Republic of Irelandpolice have been asked to consider whether the

    beef burgers were contaminated accidentally or whether there was fraudulent activity and

    intentionally mislabeling.

  • 8/10/2019 Final Supply Chain Horse Meat

    13/15

    1

    Conclusion:

    Actually the basic reason behind this scandal is complexity of the food industry's supply chains

    across Europe Because the food and retail industries have become highly concentrated and

    globalised in recent decades As I described the meat supply chain of Europe that shows the

    complex relationship of Retailer and supplier. A number of supplier and sub contractor make this

    supply chain harder. They have developed very long supply chains particularly for their economy

    lines which empower them to buy the ingredients for processed foods from wherever they are

    cheapest at any point. When many supermarket chains have withdrawn all frozen beef meals

    made by Findus and Comigel an starting investigation has shows that horsemeat sold as beef

    originated from Romanian slaughterhouses before being sold to a Dutch food trader then on to a

    Cypriot trader and on again to a French firm.

    In Nestls case the Swiss-based firm has stopped deliveries of products having meat from a

    German supplier.

    The basic reason to adulterate horse meat with beef is to financial gain trough misleading

    because horsemeat is cheaper than other meats in some countries. Some analyst say that profit

    margins have been jammed by supermarkets and it is understandable that people might cut

    corners but on the Continent the price of horsemeat is much higher as "viande de cheval" is a

    famous dish in France. Horsemeat is eaten in Italy and also used in large quantities in China.

  • 8/10/2019 Final Supply Chain Horse Meat

    14/15

    1

    Recommendation:

    European Government should make some strict rules regarding licensed slaughter houses that

    include stopping the slaughter of horses. It should be provide regulatory authority to the food

    standards agencies that can be fully check and balance on food standards.

    The Polish and Romanian governments have not only protested their innocence of exporting

    horse as beef but also pointed out that their horse slaughtering industries are not large enough to

    account for the scale of adulteration that is emerging. Respected animal welfare organizations

    should warned governments to save the horses and prevent adulteration.

    Now a daysevery organization is engaged to provide low price product to customer and it can

    only happened when organization get cheapest raw material and profit margins have been

    squeezed by supermarkets and it is understandable that people might "cut corners" So the

    supplier move toward adulteration in raw material.

  • 8/10/2019 Final Supply Chain Horse Meat

    15/15

    1

    Bibliography

    Belfast, C. E. (2013, Feb 5). Uk Northern Ireland.Retrieved Oct 29, 2014, from BBC News:

    http://www.bbc.com/news/uk-northern-ireland-21334722

    Brussels, B. w. (2014, Jan 14). New horse meat scandal hits Holland.Retrieved Oct 29, 2014, from The

    Telegraph: http://www.telegraph.co.uk/news/10571612/New-horse-meat-scandal-hits-Holland.html

    Casril, A. &. (2013). The Tesco Horse Meat Scandal. p. 1.

    Chaffin, J. (n.d.).

    Fasen, J. (2013, Feb 15). Horse Meat Scandal. Retrieved Oct 30, 2014, from The Guardian:

    http://www.theguardian.com/uk/2013/feb/15/horsemeat-scandal-the-essential-guide

    Horse meat Impact on frozen food Sale .(2013, Dec 20). Retrieved Oct 29, 2014, from Kantar

    Worldpanel: http://uk.kantar.com/consumer/shoppers/horsemeat-scandal-impact-on-frozen-food-

    sales-july-2013/

    Horse meat scandal essential Guide. (2013, Feb 15). Retrieved Oct 30, 2014, from The Guardian:

    http://www.theguardian.com

    Lawrence, F. (2013, feb 15). Horse meat scandal the essential guide. Retrieved Oct 30, 2014, from The

    Guardian: http://www.theguardian.com/uk/2013/feb/15/horse-meat-scandal-the-essential-guide

    LenkaHudakovo. (2013). Corporate analysis of Tesco image restoration strategies and sustomer reaction

    in the United Kingdom and the Czech Republic.Denmark: Aalborg University.

    Paris, J. C. (2013, Mar 14). Ft. Retrieved Oct 30, 2014, from http://www.ft.com

    Uk Horse Meat Scandal.(2013, Apr 10). Retrieved Oct 28, 2014, from BBC News:

    http://www.bbc.com/news/uk-21335872