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What is the real beef about horsemeat?

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You are standing in front of the ready meals counter looking at an array of Lasagnes, Bolognese's and meat pies. Does it really matter if there is a little bit (or a lot) of horse in the packet? For the British who are not culturally attuned to eating horsemeat - it probably matters emotionally. That is even if we cannot tell the difference when the product is laced with rich tomatoes and plenty of spices. So, which one will you select? How do you know which brand to trust?

The great horsemeat scandal has become a media event where the unspoken question is about the underlying food safety and security implications of everything we eat. How are we to know that our food does not contain something much more harmful than well processed horse? Just this week we have been warned about the health risks of consuming the levels of sugar present in soft drinks, and the heightened health risks of particulate emissions in London. There are repeated concerns that veterinary pharmaceuticals are entering the food chain and compromising drug effectiveness in humans.

Ministers and media have voiced their concerns about failings in the 'food supply chain' that, for most people, is a vague concept denoting 'things happening or being supplied' beyond the retailer or branded manufacturer. This is my area of expertise so let me elaborate in terms that I hope will make the issues accessible.

The economic success of countries and companies over the last forty to fifty years has been built on specialisation of manufacturing and distribution that enables lower costs of operation through greater scale and efficiency. This has meant that between 40% and 80% of everything a company sells has been bought from another company and processed or packaged. The average is widely considered to be around 55%. It was not always that way; before World War Two, Ford owned sheep farms to provide wool for upholstery, tanned its own leather and made its own steel. Few companies now do this, although, interestingly in the context of horsemeat entering the chain, Morrison's still butchers and packs its own meat.

But this generalisation does not just apply to the supplier; it extends to the supplier's supplier and beyond, hence the idea of a supply chain. That means that there are lots of inter-company relationships that each business has to establish and maintain with specifications for what they are buying and orders for what they actually need based on what they are selling. With so many relationships to manage, some will have thousands, a lot is taken on trust that the goods will arrive on time and to the required quality. 100% testing is not practical, so faults tend to be discovered late.

The current economic pressures are shattering that trust as prices are driven down by hard-nosed buying methods. Buyers are changing suppliers to get a few pence savings or the suppliers are responding to the pressure by offering prices that are not profitable and then looking for internal savings. Either way the process adds risk of the kind of thing experienced in the horsemeat debacle. The temptation is to adulterate or substitute; some might call it cheese-paring. With many chains of supply, it is almost impossible to see what is going on a couple of steps back up the network and the conditions have been put in place for people to defraud.

The reality of the horsemeat scandal is that it is simply another chapter in the story of increasing risk that has been seen with counterfeit goods in pharmaceuticals, luxury goods, aerospace components, car parts and many other sectors. High value goods are particularly vulnerable as the profit margins within which to work are greater. Horsemeat is perhaps one fifth the price of quality beef.

So how can this challenge be overcome when it may be invisible until it is chanced upon? The truth is that somebody will know well before it becomes public knowledge. Press reports point to warnings to Ministers that the conditions were in place for such risk to become reality in the case of horsemeat. The warnings were apparently ignored, as they may also have been within firms along the food chain. So the solution lies as much in the culture of the organisation as it does in any increased testing. When people are under extreme pressure they will be tempted to behave immorally and a few will succumb; the role of leadership is to create an organisation where people are prepared to speak out. That's the real beef and as a consumer you have to select the brand you trust and hope they are doing the right things.