UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 1035

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

ENVIRONMENT, FOOD AND RURAL AFFAIRS Committee

FOOD CONTAMINATION

TUEsday 5 march 2013

councillor mehboob khan and steve jorden

ANDREW SIMPSON, STEPHEN ROSSIDES, PAUL FINNERTY and STUART ROBERTS

PETER KENDALL

Evidence heard in Public Questions 1 - 188

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Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

on Tuesday 5 March 2013

Members present:

Miss Anne McIntosh (Chair)

Richard Drax

George Eustice

Barry Gardiner

Mrs Mary Glindon

Sheryll Murray

Neil Parish

Ms Margaret Ritchie

Dan Rogerson

________________

Examination of Witnesses

Witnesses: Councillor Mehboob Khan, Chair of the LGA Safer and Stronger Communities Board, and Leader of Kirklees Council, West Yorkshire, and Steve Jorden, Head of Regulatory Services, Worcestershire, Local Government Association, gave evidence.

Q1 Chair: Good afternoon and welcome, gentlemen. I thank you very much for being present and contributing to our inquiry into the contamination of beef products. May I invite you to give your names and positions for the record?

Cllr Khan: I am Mehboob Khan, chair of the Local Government Association’s Safer and Stronger Communities Board, and also leader of Kirklees Council.

Steve Jorden: I am Steve Jorden, head of Worcestershire Regulatory Services. I am also on the Environmental Health Policy Forum and a member of both the Chartered Institute of Environmental Health and the Trading Standards Institute.

Q2 Chair: At the outset, could you explain your respective roles in the process of inspecting meat, and which inspections you both conduct?

Cllr Khan: The Local Government Association represents all local authorities in England and Wales. We have a board, which I chair, that has oversight responsibility for the regulatory activities of local government in England and Wales. We act as a membership organisation and represent our members’ interests, and also liaise with Government on any matters of national policy that affect local government.

Steve Jorden: The role is twofold, and it varies between trading standards and environmental health, although in some parts it is combined. It is about supporting businesses and helping them develop and grow, giving them quality advice on compliance, and also seeking compliance of businesses to protect public health and consumers.

Q3 Chair: If a product has been mislabelled, which particular law will have been broken?

Steve Jorden: That would be labelling legislation that is conducted by Trading Standards, who are solely responsible for our food standards.

Q4 Chair: Who would bring enforcement action, and what action would be taken against the perpetrator?

Steve Jorden: Typically, a trading standards officer would take action. It would be a range of interventions. If it was a first offence, it might require advice; it might require a written warning. Prosecution would be a last resort. We are bound by a concordat, or enforcement code of practice, so we make sure we take a proportional approach.

Q5 Chair: How many prosecutions have taken place to date since January?

Steve Jorden: I cannot speak nationally. I am not aware of any. Certainly, in Worcestershire and the West Midlands region, there have been no prosecutions in relation to horse meat.

Cllr Khan: I am not aware of that information, but are you asking that in relation to horse meat or prosecutions in general?

Chair: The latest incidence of horse meat contamination, or large traces of pork or other meat in what has been labelled as beef.

Cllr Khan: If any legal action is being considered or taken, it is probably too early to determine whether that would result in prosecution because of the due process that would have to be followed. You raise an interesting point. We will ask our member bodies for any information they can provide on the enforcement measures that have been taken since then. We would have thought that, since the issue has had so much national publicity and is on the minds of most consumers, the top priority of manufacturers and retailers would be to put their house in order and ensure action is taken to build public confidence. Only if they fail categorically to make those changes happen would local authorities consider the enforcement route.

Q6 Chair: If a retailer is proven to sell contaminated or mislabelled food, who is held responsible-the retailer or its supplier?

Steve Jorden: It very much depends on the evidence and the retailer’s defence of due diligence. The retailer would be expected to know who is supplying them, where that product comes from and make all reasonable effort to establish its efficacy. We would have a look at that. Ultimately, it is the retailer’s responsibility. We would also follow down through the chain, and what action we would take, and against whom, would depend on what the evidence is telling us.

Q7 Chair: How would you describe your relationship with the FSA?

Cllr Khan: The relationship with the FSA is at several levels. The FSA work closely with local government in setting the national framework around the guidance that local authorities will give regard to when they have their own food safety plans for their district council areas. Each local authority has such a plan in place. The FSA have an invaluable role in bringing together a national report that sets out the national issues that local authorities will work towards. As to relationships, the FSA work closely with local government to ensure that both national and local regulators are working to national priorities and that local authorities are aware of the risks in the food chain that the FSA bring to our attention. I could go on. If you were to describe the relationship, it is an effective one.

Q8 Chair: You chair the LGA’s Safer and Stronger Communities Board. Were you consulted on the Food Standards Agency’s capability review, which concluded in January this year?

Cllr Khan: I would not have expected to be consulted on that. Officer colleagues in the Local Government Association will have been consulted on that.

Q9 Chair: It concludes that the FSA need to have a greater understanding of the challenges local authorities currently face, and ensure that they have the capability and capacity to deal with an increasingly challenging delivery landscape. Do you believe that, in all the recent tests you have been asked to carry out, the FSA have shown an understanding of the challenges that you face currently?

Cllr Khan: Since this issue became one of national concern, the relationship between the FSA and the Local Government Association has been a very strong partnership to deal with the concerns. At a local level, all local authorities are in very challenging times because of the financial difficulties facing the country as a whole. We know that, by using an intelligence-led and risk-based approach, we can overcome some of the financial challenges by working much more collaboratively with both national regulators and also at a local level. When food testing is done, it is done once and the information is shared among local authorities at a national level. The costs incurred are incurred once, and the information is used much more widely.

The FSA recognise the financial challenge facing local authorities and the complexity of the job that our environmental health officers and trading standards officers do on a day-to-day basis. There are lots of risks to which we have to pay attention and this is just one of them, but from my own experience over the last few weeks, I am very proud of the work that is being done and that public safety is a high priority.

Q10 Ms Ritchie: Do you routinely test food products for contamination, or is this done only when you suspect it?

Steve Jorden: Food sampling is done predominantly by looking at intelligence. There are two types of samples we would take. On the environmental health side, it would be mainly for microbiological issues, so we would be looking at a range of products. Maybe there is a national picture and a problem. For example, if there was information about problems with a particular product, we would do some sampling to see what the local situation was, or act regionally.

From a trading standards point of view, we would look very much at what the national picture is telling us, and that would determine whether we should be sampling. A number of complaints would come through from consumers that might indicate a local or regional problem, so we would talk to colleagues and agree a sampling programme on that basis. We do not routinely sample as such; we are very much driven by intelligence to direct us to where samples are taken.

We cannot go on a fishing trip in terms of sampling. We have to be quite clear what we are sampling and why we are sampling it, and what the standards are, because sampling is very expensive. We would need to be quite specific with the laboratory what test we would want it to do.

Q11 Ms Ritchie: Your sampling and testing is on an evidence-based approach?

Steve Jorden: It is.

Q12 Ms Ritchie: Can you, therefore, explain the role of the Food Standards Agency in your decisions to test food products?

Steve Jorden: On the environmental health side, information would generally come down through the Health Protection Agency, so they would be looking at a national picture to determine what types of foods we would want to sample. We would plug into and take part in that as a national programme, but we would also have flexibility to do something of local interest. On the food standards side, it comes down generally through the Food Standards Agency using the FSS net of which I think 63% of councils are part. That will identify particular products or types of food that need to be sampled, whether it is a labelling, composition or quality issue. We would plug into that and develop our sampling programmes based on the information coming down through that route.

Q13 Ms Ritchie: Therefore, does the Food Standards Agency provide you with guidance, or do they have the power to direct your work?

Steve Jorden: They provide us with guidance.

Q14 Ms Ritchie: What funding does the Food Standards Agency provide for your food testing? If it does, would it fully fund any test if it required you to carry it out?

Steve Jorden: They provide some funding, but, if I may refer to the trading standards side, most councils will have a sampling fund. That sampling fund often includes other types of samples, so it is not solely food. That depends on whether the public analyst is part of that council or it is a private/public analyst, so there will be a sampling budget and the council will determine its sampling programme based on that budget. On the environmental health side, the Health Protection Agency will provide credits, which effectively pay for the sample.

If I could reflect on my own situation in Worcestershire, I have a sampling budget of £100,000 a year. That has just been reduced. That will enable me to sample a wide range of products, including product safety, food, water-all those sorts of things-so we will determine locally how best to use that sampling budget.

Cllr Khan: In response to whether the FSA provide any funding, in 201112 they provided grants of £900,000, and in 2012-13 £1.6 million, to help with sampling.

Q15 Ms Ritchie: How has your relationship with the Food Standards Agency changed as a result of the changes to the remit of the Food Standards Agency that came into place after the general election of 2010?

Cllr Khan: Can I also refer to your earlier question about whether the Food Standards Agency instruct local authorities on what to do, or whether we comply with the guidance? The relationship has to be one of working collaboratively. The Food Standards Agency absolutely understand the role of local authorities, and vice versa. We do not need prescription from the Food Standards Agency; their guidance is public information. They produce an annual report and they take a risk-based approach nationally, so that shares information among different parts of the country. When issues arise they have effective means of communicating with all local authorities about what they are and how to tackle them. Anything that would change that relationship is not required.

Since the general election in 2010, the Food Standards Agency have had a new chief executive and local authorities have had significant financial challenges. That has given us the ability to have a complete rethink about how we conduct business at a local level. Instead of each local authority, of which there are hundreds up and down the country, conducting the same tests on the same food sample, and so on, 62% are sharing it. I think that number will increase significantly over the next year. By sharing the information, you are doing it only once. Even though you have less money to spend, you are making the public pound go further.

Sheryll Murray: I was going to ask about sharing services, which has already been answered.

Q16 Neil Parish: Do the Food Standards Agency give advice only in relation to public health risk related to food? Who gives you advice or assistance in relation to food composition or contamination? In the incidents involving horse meat, provided that horse meat is safe, it is not a public health issue; it is one of labelling and being certain we are eating what we are supposed to be eating. Have you got sole responsibility for that, or where do the FSA kick in on the composition of what is in that meat product?

Steve Jorden: The advice we get is from the FSA. We would also get advice from Defra from time to time on similar topics, and equally the Department of Health would give us advice where it is an environmental health issue. While it is contamination, there is a concern from an environmental health point of view as to whether hygiene standards are sufficiently robust to prevent that contamination. You will get a crossover there.

Q17 Neil Parish: You get that advice directly from the Food Standards Agency?

Steve Jorden: Yes.

Q18 Neil Parish: You have been receiving it throughout the recent problem?

Steve Jorden: Most of the premises involved are licensed or approved premises, on which there is quite detailed guidance that we would all have in mind when dealing with them, so there is very good guidance from the FSA on it.

Q19 Neil Parish: You had direct contact with the FSA immediately?

Steve Jorden: We in Worcestershire were not one of the 28 that did some sampling. However, in response to the media interest, we did our own sampling programme publicly to reassure our residents that there was no horse meat in the food chain, but we have been in contact with the FSA just to make sure there are no local issues that we need to be aware of.

Cllr Khan: The FSA did send out what is called a general notification on 8 February. Maybe some background information might help. Over the last few years there has been national interest in the salt, sugar and different types of fat content of processed food, as well as food that we buy from supermarkets and other retailers. Local authorities have worked with the FSA, Department of Health and the Public Health Institute in identifying some of those things that help improve health and wellbeing. That is done as a direct result of the national and local partnership. That information is fed into local authority and primary care trusts with responsibility to try to help people eat better and be healthy. We have lots of examples of good practice between national and local regulators.

Q20 Neil Parish: You said that you were issued with a statement by the FSA on 8 February. This is well into the problems with the horse meat. Wouldn’t you have expected something to come out before it happened rather than afterwards?

Cllr Khan: That is a general notification, which is more of a standardised way for them to notify all local authorities, but because of the media interest and the interest of local authorities and the FSA much earlier than that, we were all talking to each other and working out ways in which we could respond to the issues raised. That was a formal notification, but you did not need a formal notification to respond.

Q21 Neil Parish: That leads me to the next part of the question. Because of the current situation, do you think local authorities should be carrying out more random tests on meat products?

Cllr Khan: That is a really good question. If we knew specifically what the emerging risks were, we would be able to test for those. There is cost in undertaking a test. A useful way of thinking about it would be that, if there was pan-European cooperation between national equivalents of the FSA, and information was given to local authorities, not just in the UK but across other European countries, there would be a risk, intelligence and evidence-based approach to testing. If you walk down the food aisles of major multiple retailers, you will see hundreds of thousands of products on their shelves, but which ones do you test for what? When and how do you test them? It is a really complex issue. We can spend millions of pounds if each local authority does those tests. If we think back to 2009-10, when more tests than now were being carried out, no one can say categorically-this is a bit contentious-that what was in each and every one of those products was what was on the label. Intelligence and evidence-based testing is really important.

Q22 Neil Parish: If random testing was to take place, no one would quite know where a particular test would take place. Mr Jorden said in an earlier reply that he was not able to test various products, or he had to have a good reason to do so. Can you elaborate a bit on why that is the case?

Steve Jorden: Sampling is only one option; it is one of a range of interventions we use to seek compliance. Ultimately, it is the responsibility of business to ensure that it complies with the law. We will sample based on intelligence; it directs us where to put that resource to be most effective. When we sample food, we need to know what we are sampling for. In practical terms, I need to tell the public analyst what test I want him or her to do. I need to have some pretty clear information on that. In the UK I would not necessarily take a sample of beef and go to an analyst and say, "Can you check it for horse meat?" That would not be my immediate thought. I might say, "Can you check it for fat or meat content?" or any other sorts of products that we would normally come across. Sampling is not the complete answer.

In this particular case, we are talking about businesses where there is a strong drive for earned autonomy. It is very much about our supporting legitimate business, and that does not mean doing a fairly robust and costly sampling programme.

Cllr Khan: We should place responsibility with the boardrooms of businesses. The chief executive, chair, board and so on should have this issue on their agenda prominently, and not just now because there is a national concern about it; it should be there all the time. They should be looking at those risks and ensuring that their businesses are compliant with the law. I also sit on a primary care trust. We look at all the risks in how we provide clinical services at board level. At board level, you have ultimate responsibility in those manufacturers. By and large, British manufacturers want to comply because they want to keep the confidence of their shareholders and the public.

If I may suggest another analogy on sampling, the police stop only those drivers who they think are driving erratically under the influence of drugs or alcohol. They do not sample hundreds of thousands of drivers on our roads, do they? We need to look at the evidence and the risks that have been brought to our attention to make sure that sampling is done in a way that provides us with reassurance.

Q23 Neil Parish: The final part of my question is about trace contamination. How big a percentage is it? Sometimes you have found perhaps 0.1% of pork fat in a beef burger. What level of contamination is acceptable, provided that product is not harmful?

Steve Jorden: If it is a labelling issue, any level of contamination is unacceptable, so we would be in discussions with that particular business to find out why there is that level of contamination. There will be some national guidance about certain levels of trace elements and stuff like that, so we would be guided by that. In this particular instance we know that most of the contamination was less than 1%, but the fact is that it is there and it should not be.

Q24 Neil Parish: Is there anything laid down in statute as to any amount of contamination that can ultimately be allowed?

Steve Jorden: There are certain elements-chemicals and products-where limits are set. I could not give you particular details, but I am happy to go away and seek that if you would like further information on that. There are standards set down for certain types of products, for example meat content, and, in a meat product, there will be limits set for fat and collagen content.

Neil Parish: Perhaps we could have that in writing.

Q25 Chair: That would be helpful. Cllr Khan, you gave us the figures you get from Defra for testing, but you have not told the Committee whether that covers the total cost of the testing that has been carried out by local authorities. Could you tell us whether all the testing you carried out in the last two months is paid for either by the FSA or Defra?

Cllr Khan: I believe that over the last two months the cost of testing has been borne by local authorities. The figures I quoted are grants given by the FSA when they are requesting local authorities to carry out specific testing for them, so the moneys are a small proportion of the budget expended upon testing.

Q26 Chair: Give us an example of what testing one product sample costs.

Cllr Khan: I will ask Steve to do that.

Steve Jorden: To clarify, 28 councils were asked by the FSA to do some testing. My understanding is that some, if not all, received FSA funding to do that testing. I am certainly aware of one council locally that was given money for that. The testing we did, which was purely for horse DNA, cost £95. We spent just over £5,000 on testing locally. If you want a full set of DNA tests, the rates we were quoted were around £450 to look for pig DNA and those sorts of things, so the price depends on the range of tests you want carried out.

Q27 Chair: Is the money for meat testing ring-fenced, or does it come out of the public health budget?

Steve Jorden: It is a sampling budget. As I explained earlier, the majority of that is used for food. We might use it for water or air-quality sampling. In Worcestershire it will be for a range of testing, and that is pretty similar to most councils.

Q28 Mrs Glindon: I will carry on with the funding element. Cllr Khan, you said it was a challenging time financially for councils. Has funding for trading standards and environmental health decreased since 2010 and, if so, could you say by how much?

Cllr Khan: Since 2010, in the first comprehensive spending review, generally the funding for local authorities has reduced, depending on where the local authority is. Mine is a northern council based in Huddersfield. We lost about 25% of our budget. It will probably rise to about 33% of our budget, depending on what the Chancellor says in a fortnight’s time. I want to quote to you the figures provided by the FSA and the local Better Regulation Office, which are more independent than local authorities saying what the impact of the cuts has been upon them. The FSA have said that there has been a 12% reduction in enforcement officers. The local Better Regulation Office said that in 2011-12 there was an 8.8% decrease in expenditure on regulatory services in England and a 5.9% decrease in Wales. Trading standards budgets have been hit harder than environmental health budgets, which saw a decrease of about 11.5% in England and 8% in Wales. By and large, those are singlefigure percentages, apart from the 12% reduction in enforcement officers. If you compare that with the general reduction in local government funding, that runs at about 25%, so you can see that local authorities have not necessarily passed on the same percentage cut in their responsibilities on regulation as we would have in other parts of our expenditure.

Q29 Mrs Glindon: That is good to hear. Although that funding is lower than the general reduction in authorities’ funding, what has been the impact of the reduced funding? Do local authorities have fewer staff, inspections or testing? Has it impacted on the day-to-day work?

Cllr Khan: It has impacted on daytoday work. I am leader of the seventh largest metropolitan council in England. Over the last four years, times have been really tough; it is really difficult. Our approach to ensure we are still compliant with our duties is to look at ways in which we can be much more efficient and focused in our activities. On environmental health inspections, the biggest risk to communities in my area lies in small catering firms, takeaways, hot food establishments and restaurants like that. We have taken the approach of working with them. We help them comply and meet the requirements placed upon them rather than carry out more and more inspections, so the partnership approach to business is to help. We have reduced inspections and testing because we looked at ways in which we could share information with each other.

If you take West Yorkshire as an example, it has the country’s second, fifth and seventh largest local authorities. When we had lots of money, we would all be doing our own inspections, keeping that data to ourselves and sharing it where we thought it was appropriate, but we are now looking at joint services across the county. We are sharing information and doing things once. There are joint services not just in terms of sharing information; there are joint legal services and joint building control inspections. All these things help to make sure we can still give the public the confidence that we are there when they need us and things go wrong-when things did go wrong, we were there doing what we had to do-but also ensure that the public pound goes as far as possible.

It would be easy for me as leader of a Labour-controlled council to blame the Government for the austerity cuts and say, "Give us more money," but I have to be absolutely pragmatic and say that money is not the issue in this case. If we were still doing the same level of inspections we did in 2009-10 and not looking for horse meat or other things, that would not show up in our inspection. Remember that the answer given by Steve is that we were always looking for other things: the fat and meat content; whether it had too much bacteria, salt, sugar or other things in food that are public health concerns.

Q30 Mrs Glindon: You referred to the budget. Can you say what your specific budget is for food testing, and from which budget line that would come?

Cllr Khan: We will give a joint response to that. When I set budgets for our local authority, the budget book will have in it the cost of staffing, the cost of premises and the cost of supplies and services. It falls under that budget. The lead environmental health officers will have absolute discretion on how they want to spend the supplies and services budget. It is up to them. They will take a professional risk-based approach to what types of sampling they want to undertake, and they will share the results with their colleagues across the region and nationally as well. Steve, do you want to answer how you do it in Worcestershire?

Steve Jorden: Perhaps I can start by adding some context. Worcestershire has a shared service. They have brought together trading standards and environmental health from seven different councils into one shared service, so from that point of view it is unique in the country. We have a single budget and we look at the demand on the service, and that determines how much resource we put towards that. 80% of our costs are salaries, so we need to be very conscious that full-time equivalents are the big cost. We will be looking at the bigticket items and what levels of resource we need to devote to respond to that in a way that meets both local and customer expectations.

If I can give an example, our budget has been reduced by 24% because of the efficiency savings we have made by coming together. We will be under pressure to make a lot more savings, but we have been able to achieve that by smarter working and by being far more targeted at the businesses we visit, using intelligence and a risk-based approach, and by dealing with complaints in a different way that gives far better customer satisfaction.

Like a lot of other councils, we are looking at innovative ways of meeting the budget challenges, but our big expense is salaries, so it does come down to resources and how we use them. It is not saying, "You’ve got so much to spend on food." Each individual council will have different priorities. Food may be a big priority in some councils where there is a lot of food production by food manufacturers; for others it might not be such a big priority, so they would use that resource in other areas, such as environmental protection, counterfeit goods, rogue trading and that sort of thing.

Q31 Sheryll Murray: Could I ask one supplementary question before I move on? I was a county councillor from 2001. I know we have asked you about the implications of budget reductions from 2010, but for all the time I sat on the council the trading standards department was being cut because other departments were ring-fenced. It was widely known that they were the Cinderella services. Has your budget reduction in the last couple of years had any greater implication for your working than the ones you suffered before?

Steve Jorden: It has enabled us to work differently and smarter. From Worcestershire’s point of view and from my discussions with lots of my colleagues around the country, we are at the point where further budget cuts will be a significant challenge for us. We have achieved most of those efficiencies now through different ways of working, and we will continue to find ways, because we are still committed to providing the service that we know the customer values. By their very nature, trading standards and environmental health do a lot of proactive work that does not always receive the credit it deserves. You would need to do a lot of proactive work to stop the reactive work.

Q32 Sheryll Murray: If local authorities had more funding, what would be your priorities? Would you increase staff, do more testing, more intelligence gathering and more enforcement, or something else?

Steve Jorden: It could be a range of those. We would be looking very much at the local priorities and how they relate to national priorities. At the moment, stimulating the local economy and supporting businesses is a key priority for us. We influence the success of businesses and create a level economic playing field for businesses, so we certainly see that as a priority. Each individual council will need to decide, if they have extra funding, where that money is best spent to have the biggest impact.

Q33 Sheryll Murray: Cllr Khan, as somebody who makes those decisions or helps to, what is your view on that?

Cllr Khan: If more funding was available and it was directed towards this particular activity, in my position in the Local Government Association I would be suggesting that early intervention and prevention is far better than dealing with the consequences of it. We have seen that the consequences can be very costly. At a local level, we have in all parts of the country local economic partnerships, where business and local government leaders come together to work collaboratively in growing their local economy. We want to use the kinds of partnerships that currently exist between local authorities and businesses to work with business to help it comply better with regulations and share good practice, where it is commercially appropriate for it to do so, to encourage the best standards in all our manufacturers and retailers.

Chair: Cllr Khan, shorter answers would be really helpful.

Cllr Khan: I am sorry; I am not used to short answers.

Chair: I am sure you will get good practice.

Q34 Dan Rogerson: I apologise for missing the beginning of this session. I was at a meeting elsewhere. We have heard pretty much the answer to this question, but, for the record, do you think you would have discovered horse meat in beef products that were sold in the UK if you had had more funding?

Steve Jorden: No.

Q35 Dan Rogerson: Essentially, as you set out, there were other priorities for testing, so if you had had more money, you would have been doing things other than testing for horse meat?

Steve Jorden: It is a matter of whether the evidence suggests that is where you should focus your resource. In the UK market, that is not an obvious one.

Q36 Dan Rogerson: Now you know it is an issue, things will be different?

Steve Jorden: We would probably focus on particular premises from time to time just to do a check.

Q37 George Eustice: I want to ask you a bit about the tests. The FSA have told us that the test done by the Food Safety Authority in Ireland was not one that was necessarily accredited for the UK. I think they use the PCR testing model rather than ELISA, which is generally used. Does that cast any doubts on the findings or accuracy of the findings?

Steve Jorden: I could not comment on it; it is not something of which I am aware.

Q38 George Eustice: The FSA are now asking all local authorities to do this series of tests, and quite a lot of sample tests need to be done. Have you got sufficient testing facilities to do this? Do you have your own test facilities, or do you need to instruct outside labs?

Steve Jorden: From what we have found, we have sufficient facilities, and we had no problem in getting the tests carried out. We are lucky. Part of the council has a public analyst who is licensed or able to do these tests. There are 17 round the country, so we have not experienced any problems in getting tests done.

Chair: You have been very generous with your time. It might be helpful to have a breakdown of the total costs when we know what the costs are of the remaining councils that are testing, just for the purposes of our inquiry. Cllr Khan and Mr Jorden, thank you very much indeed for being with us and contributing to our inquiry.

Examination of Witnesses

Witnesses: Andrew Simpson, President, and Stephen Rossides, Director, British Meat Processors Association; Paul Finnerty, Chief Executive, and Stuart Roberts, Group Agriculture and Livestock Director, ABP Food Group, gave evidence.

Q39 Chair: Gentlemen, good afternoon and welcome. Thank you very much for contributing to our inquiry into contamination of beef and other products. Can I just ask you please in turn to introduce yourselves and give your names and positions for the record?

Stuart Roberts: I am Stuart Roberts, agriculture and livestock director for the ABP Food Group.

Paul Finnerty: I am Paul Finnerty, CEO of the ABP Food Group.

Andrew Simpson: I am Andrew Simpson, president of the British Meat Processors Association.

Stephen Rossides: My name is Stephen Rossides, director of the British Meat Processors Association.

Q40 Chair: Perhaps initially we can ask some questions of the British Meat Processors Association. First, could you explain the work that you do, the meat that you produce and what your immediate supply chain is, as opposed to aims?

Stephen Rossides: We are a trade association and represent the leading abattoirs that slaughter cattle, sheep and pigs, and also leading meat manufacturers in the UK, so companies that produce pies, hams and sausages. Our member companies are of course commercial companies, but we do not involve ourselves in commercial activity.

Q41 Chair: Which is your main market?

Stephen Rossides: We represent companies whose operations are based essentially in the UK. They may have overseas interests and export as well, but essentially we represent those companies based in the United Kingdom.

Q42 Chair: To declare my interest, Newby Foods in my constituency may be one of members.

Stephen Rossides: They are indeed.

Q43 Chair: In your view what has been the impact of the contamination crisis on the meat-processing sector?

Stephen Rossides: Undoubtedly, these incidents of gross contamination have undermined consumer confidence and trust in our industry and have caused reputational damage to it, so we take the matter incredibly seriously. The full facts of everything have not yet been established, and it is important to get to the bottom of that. The BMPA and its member companies are co-operating with the FSA in collecting and providing the results of testing. In terms of market impact, I do not know whether my ABP colleagues have more up-to-date figures, but there is no question but that there has been a major impact on the market.

I have figures from the Agriculture and Horticulture Development Board for retail beef consumption for the four weeks to 17 February. It shows that, while overall expenditure has been up by almost 2%, the overall volume of fresh and frozen sales has fallen by about 1%, but there has been a substantial fall in the volume of sales of burgers and chilled and frozen ready meals. Whether those are long-term shifts in consumption, I do not know; we shall have to see. It is possibly early days, but undoubtedly the main impacts have been loss of consumer confidence, which we have to restore, and more immediately impacts on the market, though we are not sure what the long-term impacts will be.

Chair: It is too early to say.

Stephen Rossides: Possibly it is.

Q44 Chair: How would you describe your relationship with the FSA?

Stephen Rossides: We strongly support the Food Standards Agency as an independent body that provides science and evidence-based advice and information on food safety issues, and this benefits both consumers and industry. We have a lot of dealings with the FSA at all kinds of levels. We are very keen to have a constructive working relationship with the FSA and what I call real partnership working. We aim to provide information and technical assistance to them where we can. We sit on a wide range of stakeholder groups within the FSA and also participate in a range of ad hoc project groups.

We have many shared objectives with the FSA. Our priorities may differ, and we do not always agree on all subjects. We have had our differences with the FSA on aspects of meat inspection, both the cost and the delivery of that, but we sense a greater openness in recent months and a willingness to hear our views on a range of matters.

My objective in life is to have a very constructive and close partnership working relationship with the FSA. I recognise they are not there to promote or defend our industry-that is not their role in life-but it helps both sides to work closely together. When we are doing what we do with them, it enables them to be an effective and better regulator.

Q45 Chair: Would you say that sometimes you are possibly too close to the FSA?

Stephen Rossides: No, I would not.

Q46 Chair: For example, when the FSA supported the decision of the Commission to ban unilaterally de-sinewed meat in Northern Ireland and North Yorkshire, when the Commission had not actually ruled on whether it was unsafe to eat, you did not really put up much of a fight as an association.

Stephen Rossides: The Government, the FSA and industry did not share the Commission’s interpretation of the issue about de-sinewed and mechanically separated meat. We do not agree with it now. We have a moratorium, not a prohibition, because we do not agree with the Commission’s interpretation, nor do the FSA. However, our industry was threatened by the Commission with some very dire measures. The FSA provided a briefing to Ministers. It was a ministerial decision to accede to the Commission’s demands, albeit very severe and fast.

We certainly do not agree with the Commission. There are some legal proceedings under way-incidentally, not from us but from industry-on which I cannot comment, which have to see their way through. I do not think we were too close to the FSA, and we still do not accept the Commission’s interpretation.

Q47 Barry Gardiner: I want to ask you about full cost recovery. At the moment, your members get a full bill from the FSA for inspections of abattoirs, meat-cutting plants and so on, but then it has a very large discount-up to 95%-doesn’t it? Do you know how much that discount represents in terms of the cost to the FSA and public purse?

Stephen Rossides: I do not want to guess at this, Mr Gardiner.

Q48 Barry Gardiner: Would you be surprised if I told you it was £20 million?

Stephen Rossides: The discount is a considerable sum of money.

Q49 Barry Gardiner: Do you think the public would be surprised to find that the cost of inspection of abattoirs and meat-cutting plants-services your industry needs to have provided to it-is not being borne by your industry but by the FSA and, therefore, by them-the taxpayer?

Stephen Rossides: I do not know whether the public would be surprised. When the FSA consulted on full cost recovery back in 2010, our response to that consultation was to say we did not in principle object to that as such, but we did say that, before full cost recovery was imposed on the industry, there should be what we called at the time an efficiency and value-for-money review of the FSA’s operations in delivering meat inspections. I am happy to say that some two years and a bit later the National Audit Office is now carrying out an efficiency review. The FSA proposals went through the relevant regulatory committees, and those committees did not accept the FSA’s proposals for full cost recovery, but we did not object to it in principle.

Q50 Barry Gardiner: It did go to the Regulatory Reform Committee, but are you seriously telling me, Mr Rossides, that no member of your association either met the Minister or an official from the Regulatory Reform Committee to lobby on behalf of the BMPA to ensure that they did not implement full cost recovery?

Stephen Rossides: I think we wrote to the Cabinet sub-committee to say what I have just said: that we did not object to the principle of full cost recovery, but before it was imposed we wanted an efficiency review of the FSA, because once the FSA had imposed full cost recovery, there was no incentive for the FSA to drive their own efficiency.

Q51 Barry Gardiner: I understand the point that you should not be paying for inefficient inspection, but you accept the principle that you should be paying for efficient inspection?

Stephen Rossides: Yes, and we said that publicly.

Q52 Barry Gardiner: You did not lobby against that?

Stephen Rossides: No. We lobbied for a full efficiency review of the FSA before full cost recovery was imposed, and by that we also included looking at ideas for alternative delivery of meat inspections within the framework of EU regulations.

Q53 Barry Gardiner: We need to move on, but perhaps you could provide the Committee with a list of any meetings that took place between representatives of your organisation and the Government or Government Ministers on the issue of lobbying about full cost recovery. Do you know of any discussions that the FSA have had with Silvercrest about the incidence of 29% of horse meat found in the Tesco beef burgers?

Stephen Rossides: Mr Gardiner, that is probably not a question for me directly, is it?

Barry Gardiner: No; it is not a question for you.

Stephen Rossides: I cannot answer that question.

Paul Finnerty: Mr Gardiner, perhaps I can deal with Silvercrest. I would like to thank the Committee for the opportunity to be heard today. Prior public pronouncements on this issue have been minimal, but we think the work of this Committee is very important and we have some important things to say in the context of Silvercrest and also the issue generally, with some recommendations as to how we can ensure this never occurs again.

Q54 Barry Gardiner: Thank you for that. Perhaps we can focus on the question about discussions between the FSA and Silvercrest.

Paul Finnerty: Silvercrest has been engaging directly with the FSAI as the competent authority in Ireland. My understanding is that the FSAI have been collaborating with the FSA in the UK.

Q55 Chair: The FSAI having informed FSA UK that they were testing products in November, were you surprised that FSA UK did not start conducting tests of their own?

Paul Finnerty: I think different competent authorities are engaged in different work streams at different times, and this was one that the FSAI had chosen to focus on late in the year. We first became aware as a business of the results of the FSAI work on the evening of 14 January. I was advised that we had an issue with certain burger products that had been contaminated with horse meat or equine meat, and on the evening of the 14th I asked our team to prepare a report for me overnight. That was made available to me at seven the following morning.

We have taken hundreds of decisions since that time, but our first one that morning was to have the general manager of that site stand aside. The reason for that was that the equine issue that arose at Silvercrest shone a light on the operation at the facility that caused great concern, in that we were made aware that products had been produced at Silvercrest that in certain cases were out of specification.

Q56 Chair: Could you elaborate?

Paul Finnerty: When we were looking at the equine results, we became aware that, for products produced at the facility for certain customers in certain cases, the first pass through of the analysis-obviously, a lot of work has been done since-showed overnight on 14 January, going into 15 January, that we were out of specification.

Q57 Chair: Was that because you were not supplying from approved suppliers, or were you not supplying products as labelled?

Paul Finnerty: The principal issue was that product was coming in from a combination of suppliers who were not approved.

Q58 Chair: For how long do you think that had been going on?

Paul Finnerty: I think it had been going on for a number of months.

Q59 Chair: Do you never visit the plants?

Paul Finnerty: We do, and I would like to come to what we did in the aftermath. At the outset, this is a matter for which we apologise. As a business, we apologise unreservedly for what happened at Silvercrest in the context of specification.

If I may move on to the equine issue caught up in the specification issue, as a business we never knowingly bought, ordered or processed any horse meat. We were a victim of a fraud, which we now see as a Europe-wide issue in the context of how this has evolved over the last number of weeks at Silvercrest.

Perhaps at this point I might try to join this together and talk about some of the reasons why it happened and how we have fixed it as a business.

Chair: We might come on to that. I will let Mr Gardiner continue, and then I will turn to Margaret Ritchie.

Q60 Barry Gardiner: I have some specific questions with perhaps very specific answers. I am sure that much of what you wish to say, Mr Finnerty, will come out in your response, but perhaps you could try to keep it to the points I ask. Larry Goodman, I understand, is currently the Executive Chairman of ABP, is that correct?

Paul Finnerty: That is correct

Q61 Barry Gardiner: You will recall the 1994 public inquiry report of the Beef Tribunal, in which Mr Goodman’s company, Anglo Irish Beef Processors, was found to have faked records, cheated customs officers, commissioned bogus meat stamps, and practised institutionalised tax evasion with the use of fake invoices. What assurance can you give to this Committee that ABP’s paper trail is more reliable than that of the previous company that Mr Goodman was involved in?

Paul Finnerty: First, I would say in response that the events you are referring to happened over 25 years ago.

Q62 Barry Gardiner: 1994, I think, was the public inquiry.

Paul Finnerty: That is when the inquiry was, and it was referring to events that significantly preceded that. Most of the allegations made at that time were not substantiated through the tribunal findings, and I think it is very important to say that.

Q63 Barry Gardiner: The inquiry found that the company had cheated customs officers, had commissioned bogus meat stamps, had practised institutionalised tax evasion with the use of fake invoices. All those were things that the inquiry found. Let us be absolutely clear.

Paul Finnerty: I think it is fair to say that over 95% of the allegations that were made at the time were found to be unfounded.

Chair: I am going to bring in Margaret Ritchie at this stage.

Q64 Barry Gardiner: Mr Finnerty has not answered the question about ABP’s paper trail.

Paul Finnerty: To be quite honest, it is 25 years since those issues arose.

Q65 Chair: Could you just explain the paper trail that related to this out-of-specification supply chain?

Paul Finnerty: Yes, if I might come on to that. Silvercrest represents 3% of our group’s activities. It is one site operating in the Republic of Ireland. We have 20 sites operating here in the UK, employing 5,000 people. We operate to the highest standards in terms of traceability of product, in line with the rest of the industry. Our traceability systems in this country, and also in Ireland, are the best in the world. The nub of the issue around Silvercrest and traceability hinges on the difference between chilled beef and the frozen product used for processed foods. It is very important, I suggest, that I am allowed to elaborate on this point just a little.

Chair: I invite Margaret Ritchie to go down this path.

Q66 Ms Ritchie: This is a question to you, I suppose, Mr Finnerty. What is your current understanding of the route by which your beef products came to contain horse meat?

Paul Finnerty: Yes. In a one-word answer, all our traceability has shown that the substantial part of the contamination derives from Poland in terms of frozen product that entered our system that was contaminated with horse meat. In explaining how this arose, I would like to demonstrate the difference between chilled beef and frozen beef. For chilled beef, which is 95% of our food business, which we operate through 12 abattoirs and boning halls throughout this country, the supply chain is very short. We try to procure twothirds of our cattle from within a 30mile radius of each of the facilities we use. Once the cattle come into our system, we have a highly secure system from there, going through our business, to ending up with our retail and food service customers. It is a process that takes a matter of days and a short number of weeks.

Frozen food is different. It is a product that has a lifespan of up to two years, and the raw material that is bought is much more commoditised. As we have seen in this incident, it tends to go through many hands.

Q67 Chair: No, I am sorry; you are getting too far away from the question. You have just told us that on the evening of 14 January you were told that a consignment, for months, in your view, was out of specification.

Paul Finnerty: Yes.

Q68 Chair: Now, we want to know why it was out of specification, and where the supply chain was deficient, please. Now.

Paul Finnerty: It was, in that the raw material that we were using that went into certain customer products was coming from suppliers who were not approved.

Q69 Chair: Tesco told us that Silvercrest went outside the supply chain to unapproved suppliers. You are confirming that that was the case?

Paul Finnerty: I am confirming that.

Q70 Chair: As far as you are aware, ABP knew nothing about it? This was entirely a lone operation of Silvercrest management at that plant?

Paul Finnerty: Absolutely correct.

Q71 Chair: Where was it sourced from?

Paul Finnerty: The products that contained the contamination in particular were sourced from Poland, as I have said, and the actions we took-

Q72 Chair: No, no. Stop talking about the actions you have taken until we have found out how you got there.

Paul Finnerty: Okay.

Q73 Ms Ritchie: You say, Mr Finnerty, that the source of the contamination was Poland. Was any of it in Ireland?

Paul Finnerty: No.

Q74 Ms Ritchie: Are you absolutely convinced of that?

Paul Finnerty: We are.

Q75 Ms Ritchie: Do you have an evidence base that indicates that?

Paul Finnerty: Yes. We have done extensive testing. We have done over 1,500 tests at Silvercrest since the issue arose, both raw materials and finished goods, and all of the positives we are seeing that are showing anything more than trace are emanating from Poland.

Q76 Chair: I am sorry, but what evidence do you have for that, and why have there not been prosecutions brought?

Paul Finnerty: Our investigation, as well as the investigation of the competent authorities, is still ongoing. There is one important point I need to know. The beef that we understood to be beef that was contaminated was ordered from Poland-from a particular business in Poland. We do not have the evidence that it was contaminated with equine at the point it left their factory in Poland.

Q77 Chair: But you have a paper trail from this plant that was reported on 14 January to be out of line. You have the paper trail that goes from that plant, you are saying, to Poland. Were these labels in English, or were the labels in Polish?

Paul Finnerty: I am not sure what language the labels were in. I do know from our own investigation that the products, clearly tracing back the product that was equinecontaminated-

Q78 Chair: How can you say that if you do not have evidence of where the labels were put on and where the switch was made?

Paul Finnerty: Because we have done very substantial work with the competent authorities in Ireland, tracing the product back to source in Poland, Chair.

Q79 Ms Ritchie: What checks did you carry out prior to all this happening, and what checks are you now carrying out, Mr Finnerty?

Paul Finnerty: As an industry we never checked for equine, and our business never checked for equine in the past. Clearly, that is one of the changes we have made since the issues arose, and we now do that. We also now no longer buy from third-party traders or middlemen. We now buy in our business only directly from primary sites that provide the raw material. The checks we are making now are to take out the risk, to derisk the whole supply chain, and to bring us as close as possible to where raw material is coming from. Most importantly, a further change we have made is that, for all frozen burgers we are making now, all the raw material comes from only Britain and Ireland. We are not taking any raw material from further afield.

Q80 Chair: With the greatest respect, Mr Finnerty, that is what you told Tesco. For the last years that they have had their supply chain with you, we heard it was on the basis that you promised them that the beef would be sourced from only Ireland or Britain. Why should we believe a word you are telling us?

Paul Finnerty: Because Silvercrest is a business that trades all over Europe. It is a business that was allowed to trade up to, or allowed to use, 30% of its raw material from nonUK and Irish sources. We were buying 5% of the raw material that went into the Silvercrest facility from Poland. It should not have gone into particular customers’ products. It was earmarked for other customer products, quite validly. The mistake was some of it going into the wrong customer products, and, as a result, breaching specification.

Q81 Chair: Surely the mistake was taking produce that was not from a confirmed, approved supplier. Was that mistake a failure of your system, a failure of your management, or a failure to go outside the supplier chain?

Paul Finnerty: We bought only from EUapproved suppliers. We understood we were buying from suppliers who were BRCapproved. They were suppliers that were as fit for purpose as any other, as we understood.

Q82 Chair: I just come back to what Silvercrest told Tesco: unless I dreamt this, we heard from Tesco that Silvercrest had an approved supply chain and were sourcing the beef from only Britain and Ireland.

Paul Finnerty: Yes.

Q83 Chair: At what stage did you stop sourcing from only Britain and Ireland?

Paul Finnerty: When we became aware in the group that we had the issue, we changed the management. We changed the division; we have disbanded the division that Silvercrest reported through, and made the decision that we were buying only from Britain and Ireland. On top of all that, Chair, on the day this issue arose, we withdrew all our product from the marketplace; 10 million burgers were immediately withdrawn when we in the group became aware that there was an issue around specification. The management changes, taking the maximum approach in withdrawing product, and the changes we have made-with not buying from the middleperson or the meat traders any more, buying only directly from source and buying only from Britain and Ireland-are a very radical package of measures to ensure that this cannot happen again on the frozen food side.

Q84 Ms Ritchie: Mr Finnerty, you say you acted quickly by closing Silvercrest facilities and installing new management. What happened to those staff in the facilities you closed? Did they go to another position within ABP, and does that indicate that the incidence of 29% horse meat in the Silvercrest product was a failure of your systems, rather than those of your suppliers? Chair, I want to go on to ask about Tesco UK.

Paul Finnerty: All the staff are on paid leave at the moment, until we get to the end of this issue, and we are looking at a couple of options around the site. I am not in a position to comment positively or negatively on that. Three members of management from Silvercrest have been stood aside pending the conclusion of the investigation. There is a due process to be gone through there. Also, in disbanding the division that Silvercrest reports through, we have asked the managing director of that division to stand aside, and there is due process to be gone through there also.

Q85 Ms Ritchie: Tesco told us that Silvercrest went outside an approved list of suppliers. To quote them accurately, they said, "We had approved for use seven different suppliers to Silvercrest, no more than that. Silvercrest chose to use suppliers that we had not approved and audited." Therefore, how long had Silvercrest been supplying Tesco UK? When did you sign your most recent contract, and how long was that for?

Paul Finnerty: As I said, the supplier list that was being used went back several months, and that was a breakdown of internal controls on our side. The Tesco contract was one that was generally renewed on an annual basis. That contract is at an end at this stage.

Q86 Ms Ritchie: Tesco told us that they stipulated that you should use only seven approved suppliers from the UK and Ireland. Did you go outside that list?

Paul Finnerty: Yes.

Q87 Ms Ritchie: What was that list, if you went outside that list?

Paul Finnerty: That was a list of companies or plants that it was appropriate to buy from.

Q88 Ms Ritchie: Were they based in the Republic of Ireland, the North or here in Britain?

Paul Finnerty: It would have been a combination of all. I mentioned that it was a breakdown of trust in terms of our business and the customer arising from that. That is not something we tolerate in our business, and I think our actions reflect that. There were other suppliers that the local team chose to supply from.

Q89 Ms Ritchie: And who were those suppliers?

Paul Finnerty: They were other companies, including supply coming from Poland.

Q90 Ms Ritchie: Can you give us the names of those?

Paul Finnerty: I am not in a position to give the name of individual suppliers at this point.

Q91 Ms Ritchie: Can you say why you are not in a position to do that?

Paul Finnerty: Because the facts are that we were out of specification. The facts are we have paid the ultimate price in having to close the factory and lose the account, at very considerable cost to our business. I have apologised for what went wrong at Silvercrest, and it has been dealt with, with the customer in particular.

Q92 Ms Ritchie: When did that happen? Can you provide us with a date?

Paul Finnerty: Of when it happened with the customer?

Ms Ritchie: Yes.

Paul Finnerty: It is an ongoing discussion with the customer at the moment. It is not concluded.

Q93 Ms Ritchie: In your written evidence you say, "At low threshold levels the tests are not completely reliable, and the tests are also costly." Do you accept the methods and finding of the Food Safety Authority of Ireland?

Paul Finnerty: Yes.

Stuart Roberts: The very simple answer to that is, "Yes, we do." I think there is an issue where the test gets below this 1% that our FSA have discussed. It is not necessarily whether it is accurate or not; it is about the fact that the confidence in it and the repeatability of it is significantly less. Could I touch on the costly point? Things have changed significantly since we made that written submission. Indeed, the gentlemen who spoke before talked about the cost of these tests. Something we have discovered-and I think as a group we have done the thick end of 4,000 tests now-is that actually some of the tests are £300 or £400.

If you want to do PCR tests, you can spend an awful lot of money. You can do ELISA tests externally, which cost between £50 and £100, and they were the ones that I think the gentlemen referred to. However, you can also do rapid tests, which I am led to believe are just as reliable as ELISA, for a few pounds. One of the things that help me in understanding some of this is that there is no excuse on cost grounds for not doing testing. You can use rapid tests, if you like, as a quick and dirty look for something, and if you see something, you can ramp up the tests. I was not being misleading in my written evidence, but certainly things have moved on significantly since then.

Q94 Chair: Mr Finnerty, you said the supplier, but we heard from Catherine Brown, the incoming Chief Executive of the FSA, that, in her view, the supplier had been in business for one year-this new, bogus supplier that your firm had been using. What assurance can you give the Committee this afternoon that you have put checks in place to make sure that your business now will take responsibility for testing food going into your processed and frozen meats, to make sure that this never happens again?

Paul Finnerty: A categorical assurance: we have been the most tested company in the world in terms of equine over the last several weeks, and all our business is clean with the exception of Silvercrest. We have developed protocols with our customers, whereby product is now only positively released. We take product that there could be question marks over in terms of equine, whether that be minced product or whether that be beef product. We are using a combination of testing, ELISA testing and PCR testing, on set sample sizes, and product is only released into the food chain after all tests prove negative, as they have been over the past couple of weeks. It is in conjunction with our customers that we have developed the protocols to do this.

Q95 Chair: And that will carry on now forever and a day?

Paul Finnerty: It will. It will carry on for the foreseeable future.

Q96 Mrs Glindon: Mr Finnerty, you have said that you have the shortest supply chain possible, and you know this is a Europewide issue. Could you tell us about any business that ABP does with Brazil in relation to meat products?

Paul Finnerty: We do no business with Brazil at the moment in terms of product that we are working with.

Q97 Sheryll Murray: I would like to turn to trace contamination, and specifically again to ABP. Does Dalepak in Yorkshire use the same suppliers as Silvercrest?

Paul Finnerty: It used largely the same supply base, up to a point in time, but Dalepak is a business that has not shown positives using FSA measurement criteria. It had two instances of trace, but it has changed. The point here, if I might go back to it, is that we have made changes, substantial changes, on the raw material supply chain that we use.

Q98 Sheryll Murray: Specifically, can you update us on your findings and subsequent action in relation to Dalepak, please?

Paul Finnerty: The findings, fortunately, are that Dalepak is clear. There have been hundreds of tests done on product coming out of Dalepak, and also the raw material going in, and none of that has tested positive. Dalepak now is a business that we are investing in for significant growth down the line.

Q99 Sheryll Murray: Has any horse DNA been identified in any other meat products from the ABP Food Group?

Paul Finnerty: It is back to my point that we have, through the group, outside of Silvercrest, performed 2,500 tests, which were all negative.

Q100 Sheryll Murray: So you can categorically guarantee that horse DNA has not been found in any other meat products from your company?

Paul Finnerty: No, as I have said, other than a couple of instances at trace levels-not positive, as the FSA would measure it-there is no equine. Do you want to add to that, Stuart?

Stuart Roberts: Yes, and we can be categorical about that. I would also like to put on record that there was some discussion, and there was an announcement, about a potential positive-I think it was a Bolognese sauce that came out of a company called Greencore, who said that the contamination had come from one of our sites. We at that stage said that we were very clear that it could not have come from our site. We traced every animal back to every farm it had gone to, and we were very pleased yesterday when Greencore announced the findings of their investigation, which cleared ABP of having anything to do with any contamination in relation to that.

Q101 Sheryll Murray: Finally, do you have any concerns about specific DNAtype tests, or any type of DNA test, carried out by the Food Safety Authority of Ireland that identified trace contamination?

Paul Finnerty: No. I think there is a lot of noise about different types of testing. There are issues: our scientific adviser from Leatherhead was saying that one needs to be careful about how you interpret individual tests. In particular you need to be very careful down at trace levels about the validity of results there. What has become clear to us as a business is that there needs to be a combination of ELISA tests, which in the first instance catch if there is contamination at over 1%, and what is called PCR testing, which is a more precise measurement tool.

Q102 Sheryll Murray: Can you avoid trace contamination when the food processors use more than one meat product in the same factory?

Stuart Roberts: This gets to the heart of some of these issues. A little bit like the GM debate a few years ago, the science of detection has moved on much faster than what my colleagues would call the good manufacturing practice or policy in this area. What we do not yet know, and we as a group are engaged with Defra’s work on this at the moment, is whether the rigorous controls we have all had in place historically to manage hygiene are the same controls we now need to deal with DNA. The honest answer to that is that nobody has yet given us that answer. As I say, we are busy working with the FSA and Defra. Certainly, when you get down to very low levels, our experience would be that the repeatability of the test starts to become, not unreliable, but challenging. Certainly we would have tested the same batch of products in two different ways, at very low levels, and you do not necessarily get the same result every time.

Q103 Barry Gardiner: Mr Finnerty, you said that you were not prepared to give the names of the companies that had gone off your supplier list. Could you tell us, are any of those companies that were in that list UKbased meat traders? You do not need to give us the names.

Paul Finnerty: The very short answer to your question is no. There were no UK meat traders. The question that the authorities are still trying to get to the bottom of is whether there was any issue en route from Poland through to our business in Silvercrest.

Q104 Barry Gardiner: Yes, indeed. I had understood that ABP had named an Irish meat trader, McAdam Foods, as the supplier of meat to its Silvercrest factory for Tesco burgers. Were they one of the companies that you were saying you could not name?

Paul Finnerty: I have to be very careful with regard to naming companies in this forum, because our investigation is not complete.

Q105 Barry Gardiner: You will know that McAdam has said that they bought meat from Poland and supplied it to you. They say that they delivered mostly pork and not beef to ABP.

Paul Finnerty: Just as a point of detail, McAdam is a trader in the Republic of Ireland, operating at the border, and as I have said, the substantial evidence is that the source of the issue here is Poland. Most of that has come directly into our business. Some of that has come in via traders.

Q106 Barry Gardiner: And McAdam was one of those traders?

Paul Finnerty: I would like to be very careful not to name names.

Q107 Barry Gardiner: McAdam have said they were one of the people who supplied meat to you, haven’t they?

Q108 Paul Finnerty: Yes.

Q109 Barry Gardiner: So you are not saying it; they are saying it.

Paul Finnerty: Yes. They are a business that we have been trading with.

Q110 Barry Gardiner: Thank you. Did they deliver mainly beef or did they deliver mainly pork to you?

Paul Finnerty: They delivered both.

Q111 Barry Gardiner: "Mainly" is the question.

Paul Finnerty: They delivered both.

Q112 Barry Gardiner: Perhaps you could delve back in the records and find out what amounts of both were delivered.

Stuart Roberts: I would be very happy. I was going to say, in terms of "mainly", I think they were very finely balanced, but I will write to the Committee with those volumes. I would be very happy to do that.

Q113 Barry Gardiner: Thank you very much. Could you tell us whether ABP, or indeed the Executive Chairman, have any stake in Rangeland Meats, to your knowledge?

Paul Finnerty: The answer to the question is no.

Q114 Barry Gardiner: Thank you. Do you have any stake, or does Mr Goodman have any stake, in Norwest Foods.

Paul Finnerty: The answer to the question is no.

Q115 Barry Gardiner: When did Ray MacSharry Junior leave the employ of ABP or of Goodman Holdings to work in Norwest?

Paul Finnerty: I am happier to revert to the Committee at a later time. I don't know. It is a long time ago.

Q116 Barry Gardiner: That is fine. When did Eamon Mackle and Jim Fairbairn leave the employ of ABP or Mr Goodman and start work with Freeza Foods?

Paul Finnerty: Again, I am happy to respond to the Committee.

Q117 Barry Gardiner: That would be extremely helpful, thank you. What relationship does ABP Food have with Comigel? Does ABP or Mr Goodman own shares in that company?

Paul Finnerty: No, no relationship, to the best of my knowledge.

Q118 Barry Gardiner: Mackle and Fairbairn were part of what I think was called "the A team" at the Goodman Group, repackaging and re-labelling meat at various plants. Did they engage in this activity at Freeza Foods?

Paul Finnerty: I suggest that is a question for Freeza Foods. I have no knowledge of these people.

Q119 Barry Gardiner: You have no knowledge of the A team?

Paul Finnerty: No, I do not, Mr Gardiner.

Q120 Barry Gardiner: Could you check whether they ever worked for the company or for Mr Goodman?

Paul Finnerty: I am very happy to.

Q121 Barry Gardiner: You will recall that Mr Goodman revealed that he had a hidden group of companies called the "Cork companies". Are any Cork companies still in existence, to your knowledge?

Paul Finnerty: Again, through the Chair, I think this is going back over 25 years, and I have no knowledge of-

Q122 Barry Gardiner: You have no knowledge, and you do not know whether any of those are currently engaged in meat processing at all?

Paul Finnerty: No. I believe not.

Q123 Barry Gardiner: If Cork has gone, was it replaced by any similar structure of secret shares in meat processing companies?

Paul Finnerty: Could you repeat the question?

Barry Gardiner: Cork was a secret set of companies, was it not? To the best of your knowledge, there is no similar structure in place at the moment?

Paul Finnerty: Let me go further. It is very simple. All our meat business is operated through the ABP Food Group.

Q124 Barry Gardiner: Fine. Has Finbarr McDonnell, Managing Director of ABP Poland, authorised the purchase of horse meat for sale in Europe?

Chair: It may be of help if I say at this stage that we have no power to require any information or provision of papers extending to a nonUK company. If it is sub judice, if it is part of your investigation or the Irish investigation, it would be very difficult for us to push into those areas until such time as the investigation is complete. If you want to write to the Committee in answer to these questions, that would be helpful.

Barry Gardiner: Mr Finnerty has been very transparent and said he is happy to engage with us in these questions, and I am grateful for that. Has Franck (Zhou) Fang, the Marketing and Procurement Manager for ABP China, been authorised to buy horse meat in China for export to Europe?

Paul Finnerty: Through the Chair, we do not trade in horse meat, full stop.

Q125 Barry Gardiner: So Franck (Zhou) Fang is not the Marketing and Procurement Manager of ABP China. Or is he?

Paul Finnerty: In response, we do not trade in horse meat. It is possible that there may be licensing that covers multispecies in terms of how some operations are set up, but we do not deal in horse meat in any part of our Group. We do not buy it, we do not process it, and we do not sell it. It has nothing to do with our operation.

Q126 Barry Gardiner: So those two gentlemen, Franck (Zhou) Fang and Finbarr McDonnell, could not have been authorised to purchase horse meat for the Group?

Paul Finnerty: Not to the best of my knowledge. Not unless there is some kind of funny licensing quirk.

Q127 Barry Gardiner: Did Dr Angus Knight meet at any stage either any UK or any Irish Minister on behalf of ABP to discuss the validity of the DNA testing?

Paul Finnerty: Not to the best of my knowledge. Mr Knight, who I think is in the room, is our scientific adviser, and any meetings he has been at with any officials, I think, have been with me.

Q128 Barry Gardiner: And you could write to us and let us know if there any that did not take place to your knowledge-

Paul Finnerty: Again, we wish to be very open and transparent on this. We have nothing to hide. We are very happy to provide additional information.

Chair: Thank you. If we could just go back to our original information, that would be helpful. You will be aware that before 2009, 2,000 horses were slaughtered per year in Ireland. After 2008, about 25,000 horses were sent for slaughter at registered abattoirs and slaughterhouses. That is quite a large figure, isn’t it?

Paul Finnerty: Again, it is 20,000odd horses. The annual cattle kill, which is our business, is in excess of 1.5 million per year, and horses is not something we have ever focused on in any shape or form in our business.

Q129 Chair: And you have no intelligence to suggest that these horses, slaughtered in Ireland, might have entered the food chain as beef in the United Kingdom?

Paul Finnerty: None whatsoever.

Chair: Categorically.

Q130 George Eustice: I am not a barrister, so my questions will be slightly less narrow. I know you would not name the supplier, but I just wanted to ask, coming back to the ones where you import directly from Poland, do they admit culpability or admit that they supplied products labelled as beef when in fact it was horse? Do they admit that much? They do not dispute your version of events?

Paul Finnerty: They do not dispute the trading relationship. The company in question, to which you are referring, has made a public denial. The facts of the matter are that we have a product in our cold store that we bought as beef, which is testing positive for equine. The key issue is where that contamination or adulteration occurred in the supply chain. Did it occur through their business, or did it occur somewhere else, before it reached our business? The point here is that we are the victims in this, like many other businesses around Europe-I think of Nestlé and Findus and Birds Eye. On the products that we bought as beef, we were defrauded, and it has entered into our business sporadically contaminated with horse meat.

Q131 George Eustice: You said earlier that you could not say what language the labels were in. Is that because that is an issue that is disputed, or because you do not know?

Paul Finnerty: I have not inspected the labels directly. I don't know whether you have anything further?

Stuart Roberts: I have not.

Q132 George Eustice: Did they supply something that in Polish was labelled as horse meat in good faith, and you did not read Polish?

Paul Finnerty: No, that is not right.

Stuart Roberts: If I could just make one point on this, I think it goes back to some of the points that Mr Gardiner made as well. As Paul says, we do not know at what point we were defrauded between the licensed premises in Poland, and arrival in our factory. What we have done is that every single piece of information, including labels, etc, etc, and health marks, of course, which are very important in this area, has been passed to the authorities and the police. The authorities here and in Ireland, and obviously the police in Ireland, are carrying out a very thorough investigation as well. We cannot speculate on where that took place, but I hope they will get to the bottom of it very quickly.

Q133 George Eustice: I want to bring the BMPA back in now, as you have had a good break. More generally, on the issue of regulation, Mr Finnerty mentioned earlier that there were more risks, basically, with frozen meat products because you had a longer supply chain and the product was commoditised. Do you think there is a lack of regulation particularly in that area, and maybe we need tougher traceability rules to ensure that you do not have problems with frozen products?

Stephen Rossides: I will make a general comment; I don't know if Mr Simpson wishes to comment as well. I would say the issue here, narrowly in this horse meat episode, is less one about regulation. There is not a systemic breakdown of the meat supply chain. It is a question of fraud, and there has been criminal behaviour somewhere along this comparatively narrow, small number of supply chains, and comparatively small number of products, as the testing shows. The issue is, from a regulatory point of view, whether you found a legislative regulatory system on the basis that everyone could be a criminal. I think it is less a question of regulation-there may be some areas to look at here-than one of fraud.

Q134 George Eustice: The Government is obviously proposing a more riskbased approach to the inspection regime for abattoirs.

Stephen Rossides: We are a long way from that.

Q135 George Eustice: Do you think there is a problem, though, that the issue with food, particularly the meat industry, is that you never know what the next risk will be? It seems that everybody was blind to this possibility that horse meat could be entering the food chain as beef. That is why you need thorough tests, done regularly.

Stephen Rossides: A number of people have said this, and I don't think anyone would ever have envisaged, in the world, that horse meat would enter the food chain. I don't think any-

Q136 Chair: Excuse me, but in paragraph 8 of our report into de-sinewed meat last year we said, categorically, that there was a strong possibility that this would happen. I think you would wish to be responsible for your supply chain, and you, Mr Finnerty, and you, Mr Rossides, must take some pride in knowing where the food you are selling is coming from.

Stephen Rossides: Yes, Madam Chair. Food business operators’ responsibility, legally and morally, is to produce safe food, and to describe and label it accurately. By far the great majority of businesses do exactly what they are supposed to do, day in, day out. We here have instances of fraud, and I am not sure that, prior to it happening, the regulatory system could have envisaged that. That is why everyone has been so shocked about it.

It raises a number of questions, and what we have to get to the bottom of is what controls may or may not be needed-and we still have not got to the bottom of the facts of this. What are proportionate controls, what are riskbased controls, what are workable controls, what are affordable controls in the light of this? I don't think in hindsight that anyone would realistically have envisaged that horse meat would have entered the food chain in the way it has.

Q137 Chair: Not specifically horse, but we warned it was potentially another, cheaper product being passed off. Mr Gardiner would ask, I am sure, Mr Finnerty, if you now know that you have been passed off horse meat for beef, who will you sue?

Paul Finnerty: That is the subject of our investigation, and that needs to be followed through. Obviously there is a process to be gone through there.

Q138 Barry Gardiner: But, Mr Finnerty, you said of course that there were continuing investigations into the criminal activity here, but this is a contract. You had a contract with someone. That contract was to supply you with beef. You now know that you were not supplied with beef, and you know with whom you had that contract. Therefore, it makes perfect sense that there is no investigation to be done at this point. You know they supplied horse instead of beef. Why are you not suing them?

Paul Finnerty: I am not saying we will not get to that point. I am saying that this is a matter that is being investigated not just by our business, but by the competent authorities. The company in question are disputing that they are the source of the equine here, and the investigation now performed by the police authorities-

Q139 Barry Gardiner: It is not a matter of the source, though, is it? They had an obligation to supply you under the contract, wherever it came from.

Chair: Let him finish.

Paul Finnerty: If I might finish, we ordered and paid for beef. What we received was something different. The question is, where did the adulteration arise? Did it arise before it was dispatched from the company we bought from, or somewhere else en route? That question has not been resolved yet.

Q140 Dan Rogerson: So what you are saying, following on from Mr Gardiner’s question, is that you will not go to court until you are absolutely sure that you can prove it was not changed en route? The question I want to ask-I am not sure whether you want me to move on to that question or not-is that in terms of public confidence, there are some very serious questions about the length of the chain. The issue is one of people who would find it unpleasant to know they are eating horse, and it is a labelling issue. It is the fact that some people may be repelled by it, and for other people it may not be a problem as long as they know what they are eating. What this also leaves us open to, however, if we have this length of supply chain, is that you are not clear whether the meat you have is the meat that left the supplier, which is why you cannot go to court and sue them. How are you able to say that that meat is safe for human consumption?

Paul Finnerty: All of that meat has been withdrawn. We withdrew the 10 million burgers-

Q141 Dan Rogerson: After the fact, but prior to the fact, on the basis of a riskbased approach, we need to have confidence that the meat is going from Point A to Point B, and then becomes C, which goes on the shelf in the superstore.

Paul Finnerty: Absolutely, and what we do now is buy only from producers. We do not buy from any middle parties. We only buy, for our frozen burger products, from primary producers in the UK and Ireland, and there is no evidence that there has been any issue in terms of equine contamination emanating from them. We audit all our suppliers now. We did not do that before: we relied on the EU licensing regime and the BRC accreditation. We are now auditing all the suppliers we are buying from. We have shortened the chain; we are auditing who we buy from; and we are restricting it to these two islands.

Q142 Dan Rogerson: That is a lesson everyone has learned, and we will move on from it. How confident are you that, had there been anything that could have been harmful to human health in that meat, you would have picked it up?

Paul Finnerty: In all the sampling that was done originally, where any positives were shown, that product was also tested for bute, and it all showed negative.

Q143 Dan Rogerson: Once the alarm was raised. What I am saying is, prior to that alarm being raised by the decision of the FSA in Ireland to conduct this extra test, how confident are you that there was not contamination within another product, or that it was all handled in hygienic conditions, and so on? How can you have confidence in that meat?

Paul Finnerty: It is going back in time. It would be speculation on my part, because I am not able to test everything that was sold over the past year, but there is no evidence that there was any bute contamination of any of the products that tested positive for equine.

Q144 Dan Rogerson: It is not even just bute. What I am saying is, how do we know that this meat had not been sitting at the wrong temperature for a while? Once you have a problem with the meat you are using that has been commoditised, how are we confident that any of the parameters that could give rise to problems have not been breached?

Paul Finnerty: The only thing we did not test for was equine.

Q145 Dan Rogerson: But you test for all the other stuff?

Paul Finnerty: We do microbiological testing; we test for E. coli; we test for salmonella. We have a very sophisticated food safety testing regime right through our business, which ensures good safety. The one thing we had not tested for, and nor had the industry, was equine, but anywhere there has been a positive in the product that came out of Silvercrest, where bute is also tested for by the FSAI, that came up negative.

Q146 Richard Drax: Can I ask both of you-perhaps Mr Rossides could answer first, to give Mr Finnerty a rest-where the profits are being squeezed most in the food chain?

Stephen Rossides: The whole food chain is under pressure, Mr Drax. Speaking from the point of view of my members, they feel in a very uncomfortable place. Livestock supplies are falling in the United Kingdom. We are well below selfsufficiency, as you probably know. Livestock supplies are falling, and from the point of view of our members, although farmers would probably disagree, they are facing very high livestock prices. Their other costs are also rising, of course: energy, labour, whatever. All those costs are rising, and on the other side there are extremely competitive retailers; we know the consumer is having a hard time in a difficult economic environment, and retailers are seeking to keep prices to their customers down.

From the point of view of my members-and Andrew runs a company, so he is at the coalface on this-they are in a very uncomfortable position, as I say, between quite high input prices, including raw materials, and very competitive supermarkets seeking to contain prices. I can only speak for my membership, but I think they feel in a rather difficult place in these tough trading times.

Q147 Richard Drax: Has that increased the risk of adulteration, do you think?

Stephen Rossides: I don't think one can go from A to B on that. I don't think one can draw that conclusion, necessarily.

Q148 Chair: Does Mr Finnerty want to reply as well?

Paul Finnerty: I do not believe so. I think British retailers are as sophisticated and as operationally excellent as any in the world. It is a very competitive industry, as we all know. It is very competitive through the supply chain, but there is no evidence that that in turn leads to bad practice. What I have talked about in our business is an exception on one site. The inference is that because of the competitive pressures passed down the chain, rules are broken, and the product is of a poorer quality, perhaps, than it should otherwise be. I would not accept that to be the case. I think there is a line that you do not go over in terms of dealing with specification, as we have evidenced.

Q149 Richard Drax: So in your view it is criminal, rather than companies trying to cut corners or fraud, to be blunt, isn’t it?

Paul Finnerty: In a nutshell, this is a fraud. This is a fraud on an EUwide scale of equine entering the beef system that has been perpetrated on the consumer and the rest of the supply chain.

Q150 Chair: You will realise that the difficulty we have, and the problem for consumers, is that we are two months on and we still do not know, or you are telling us you do not know, at what point the product entered the supply chain. Until we know that, short of sourcing all meat going into processed and frozen food from this country, I don't think our consumers will be satisfied.

Stuart Roberts: I would not disagree with that, Chair. For me, that is why, in disbanding the Convenience division as Paul did, what we have done is brought the rigours that apply in our Chilled division, where we work with 10,000 farmers very closely, and we have shortened the supply chain. That is how we will protect ourselves against the risk of this, by having as short a supply chain as we can, not just for our fresh beef, as we always have done, but applying those same robust rigours to our frozen business.

Q151 Barry Gardiner: Mr Rossides, do you think the loss of de-sinewed meat has led to increased demand for cheap meat from abroad?

Stephen Rossides: The moratorium on the use of de-sinewed meat leaves manufacturers with three options. They can either source expensive, what you might call "muscle", meat; they can use and label mechanically separated meat; or they can seek alternative filler materials-trims or whatever. Those are the options available to them, and they will make that commercial decision according to the product they are supplying, according to their customers’ requirements, according to availability, quality and price.

Q152 Barry Gardiner: At the end of January, the FSA turned up at Newby Foods to check whether the moratorium on de-sinewed meat was being respected, but you will know that they were denied access. In fact, they were told that they would not be allowed into the factory to make that check, because they did not have a search warrant. They had to go away; in fact I think they were given a cup of tea whilst they went away and got a search warrant. Is that the sort of cooperation you think your members should be affording to the FSA as it tries to conduct inspections?

Stephen Rossides: I cannot comment, Chairman. I am not trying to be difficult or evasive here, but I cannot comment on that. In fact I did not actually know that. I think Newby are in legal proceedings, and that may have been the basis of some of their thinking, but I am not in a position to speak on their behalf.

Q153 Chair: It is sub judice.

Stephen Rossides: Yes. It would not be fair or right for me to comment, I don’t think.

Q154 Mrs Glindon: Tesco says it will now source more meat from the UK. How will this affect you, and will this necessarily lead to higher prices for consumers?

Paul Finnerty: I would respond to that by saying I think some of the consequences of this situation will be very positive for the industry as a whole. As we have said here, it will shorten the supply chain; it will result in more British beef being produced. We spend, in the rural economy, over half a billion pounds per year on the cattle we buy, working with 10,000 farmers. As I say, one of the learnings here is that we will be buying more British going down the line.

Andrew Simpson: If I could comment, there is an underlying issue, and that is that the UK does not produce enough beef to feed itself, and therefore inevitably some beef will have to be imported, period.

Stephen Rossides: Madam Chair, Tesco made a very public commitment to review its sourcing policy and shorten its chain. I think some detail needs to be put into that. They said they would be conducting a lot more testing, and I am sure there will be a lot more testing done across the whole industry. They also said prices to consumers would not go up, which suggests either that the efficiencies they will find in shortening those supply chains will pay for all those extra costs, or that Tesco itself will absorb those costs, or, if prices to consumers will not go up and there are additional costs, that those costs will go back through the supply chain. It must mean one of those three things, and I am not entirely sure which of those it is.

Q155 Mrs Glindon: Could I ask you to say what will be the realistic outcome? Will it be that the prices to consumers will be the ultimate cost?

Stephen Rossides: I said that Tesco stated publicly, at last week’s NFU Conference, that prices would not go up to consumers. That is what they said. Therefore, those three options that I described must follow, I would argue.

Paul Finnerty: One of the interesting things about this situation is that chilled beef sales have not fallen. That is where, as I say, 95% of the market at supermarket level and private label is. It is in chilled beef.

Q156 Chair: Could you describe chilled beef?

Paul Finnerty: Non-frozen and nonprocessed, just the chilled beef that you see on the retail aisle and on the counter. Sales have been flat throughout this whole situation, with the exception of burgers, which have come back. Frozen burgers have obviously come back more. I think fresh burger sales will recover in the near term, and beyond that it becomes a matter of matching demand with supply. Demand has not been negatively affected, and I think more of the supply will be coming from the UK and Ireland as opposed to further afield.

Q157 Chair: Just to conclude, Mr Finnerty, you have said that you have removed the middleman and shortened the supply chain. In this country, we are now familiar with the Red Tractor label, and we have imposed even higher animal welfare standards, probably, than yourselves. Are you looking in Ireland to introduce a similar farm assurance scheme?

Stuart Roberts: Yes, and I had best declare an interest, Chair, as a Director of Assured Food Standards. One of the things ABP are very proud of is that we were one of the organisations very much at the start of farm assurance, and all the stock we look to buy is farm assured. We are equally engaged with the equivalent scheme of farm quality assurance that takes place in Ireland, and we would be big, big supporters of it.

Chair: On behalf of the Committee I thank you very warmly indeed for being so generous with your time and answering all our questions. Thank you very much indeed.

Examination of Witness

Witness: Peter Kendall, President, NFU, gave evidence.

Q158 Chair: Mr Kendall, good afternoon. I welcome you most warmly on behalf of the Committee. Thank you for participating in this inquiry on contaminated food. Would you just like to give your name and position for the record please?

Peter Kendall: It is Peter Kendall, President of the National Farmers Union.

Q159 Chair: Excellent. Are you personally convinced that this is an EUwide problem, and that it is one that should be treated to find an EU solution?

Peter Kendall: That is absolutely right. This has occurred now across a number of countries within Europe, but listening to the questioning that has just gone on, I think for us in the UK it is really important to get to the bottom of what has happened in Ireland, because they are a major trading partner of ours. I am surprised that we have seen very rapid responses to questions in France and what happened with the RomaniaFrance connection, yet bearing in mind that this was first raised in Ireland in November, we are still waiting for answers.

Q160 Chair: Is this not a wonderful opportunity for the British farming community to seek to source, not just more fresh meat, but more British produce going into our own produced frozen and processed foods?

Peter Kendall: We have been incredibly measured in how we respond to the crisis, because there will be some people who will be put off, potentially, consuming meat products. We have to balance that with the potential and opportunities of having shorter supply chains, and retailers wanting openly to brag about their sourcing policies and their hopefully strong and profitable relationships with farmers in the UK.

Q161 Chair: Could you tell us of your recent discussions with CopaCogeca on this particular issue and about the EUwide response to the contamination of food products?

Peter Kendall: One of the jobs I do as well as being President of the NFU is to chair the Food Chain Working Party within Copa-Cogeca, and we have had discussions about the scale of the problem. I think it is a common feeling among the farming community across Europe that this is something that has real potential to damage our reputation, so I think there is widespread concern and anger at what has happened. As I said in a speech last week at our NFU Conference, when the beef leaves our farms, it is 100% British, every last kilo of it. We know where it is produced, we know the tagging and the traceability that has gone on. Therefore to find our products, that we put so much effort and pride into producing, adulterated when they reach consumers has left farmers incredibly cross.

Q162 Chair: You have just referred to the Irish situation, but is it not the case that we still do not know any more of the food chain across the European Union, whether it is sourced from France or anywhere else? We are still no clearer, across the EU, as to knowing at what point the contamination has entered into the food chain. It is not just in Ireland.

Peter Kendall: The very large adulteration that occurred between Romania and France-I think it was reported that 750 tonnes went through one plant in France-was a large part of that, and very quickly the plant was shut down and cleared out. I understand the management was changed and it has since been licensed to start production again. That strikes me as tackling an issue very rapidly.

Q163 Chair: How would you like to see traceability improved elsewhere in Europe? How would you like to see traceability reach our standards?

Peter Kendall: I have said that I chair the European Food Chain Working Party, but I bat unashamedly for British farmers. I work tirelessly, hopefully, to get more demand for English and Welsh, Scottish and Northern Irish products. My key role is to drive demand for British farmers. We have worked very long and hard to develop the whole farm assurance system in the UK, and the Red Tractor logo is a symbol of that traceability.

It is important that we do not overclaim, but the fact that we have independent inspections, and that, as farmers, we pay for an independent person to come and look at our farms, check our records, check how we are doing and policing means that it is traceable from the farm to the plate. It is a commitment we have made as a farming industry. Why? Because of BSE and foot and mouth 15 to 20 years ago.

Q164 Chair: I personally received a written answer from David Heath, and he confirmed the content in evidence to our initial inquiry on this matter. I want to ask you whether you are convinced that the inspections at port of exit in all EU member states on all meat products are being conducted, both a physical check and a label check, before they are allowed to leave that country.

Peter Kendall: I think it is incredibly difficult with international trading now to make sure that all inspections are done to the degree that would give my members confidence. We know there are large volumes of illegal meat traded, and that is a concern particularly when we look at disease spread at this moment in time.

Q165 Chair: How would you like to see consumer confidence restored, and what role do you think farmers have in that process?

Peter Kendall: There are a number of things. One, we have to carry on the very, very extensive testing that has gone on. It has to be rolled out into other ranges of products, and we have to make sure that testing is done and relayed clearly to consumers. Then we have to look at how we prevent this sort of scandal from occurring again. We are therefore looking for shorter supply chains, closer working relationships between farmers and their end users. I will be quite clear to say that my current supply chain is very simple. When I say "simple", I mean farmerprocesserretailer/shop. Nor does it have to involve crossing many borders, with lots of traders in between. I have quite clearly made the analogy: this is not nuts and bolts, it is not a mobile phone, it is our food. Why does it have to change hands so many times to try to save money?

Q166 Mrs Glindon: Have you any intelligence to suggest that horses slaughtered in Ireland might have entered the food chain as beef in the UK?

Peter Kendall: No.

Q167 Mrs Glindon: You have said a short or dedicated supply chain in meat processing would be helpful. Do you think that would allow for greater traceability?

Peter Kendall: Yes, and there are some really good examples in the UK already. If you look at how Waitrose work with Dovecote Park, for example, just outside Pontefract, they are designated suppliers for whom they have very exacting standards, and they work closely with that retailer, through a designated abattoir, to make sure it meets their specifications. That is an example of how in designated supply chains that traceability works very clearly. Why? Because one thing that has come out in all this over the last few weeks is that a retailer’s reputation is everything, so therefore they need to take control of it, and make sure farmers have the ability to invest, make profits and deliver that product at the right time and at the right spec.

Q168 Barry Gardiner: Mr Kendall, what in your view should be the role for the FSA in regulating the supply chain, if any?

Peter Kendall: It is really important that the FSA is an independent body that acts to make sure there is transparency, and that any inspections it is doing are clearly reported back to the industry and consumers. It acts, to me, as a very independent and transparent policeman of food safety.

Q169 Barry Gardiner: Would you agree with the Interim Report of this Committee that suggested that any inspections should automatically have to be reported back to the FSA, no matter who conducts them, whether it is the retailers conducting them for their own account, whether it is the local authorities or whether it is the FSA themselves?

Peter Kendall: I am conscious that we live in a bureaucratic world. I am conscious that we try not to add cost at every point. However, if there is a sensible, proportionate manner of doing that, then there is a lot to be said for that. We are running commercial businesses, and what I don't want to do is to saddle the whole industry with more bureaucracy and red tape.

Q170 Barry Gardiner: Do you think there is a role for the FSA in not simply highlighting to local authorities areas that they may care to pursue over the coming year, but also suggesting to retailers that, again, proportionate to the risk and proportionate to the amount of product that they might be shifting in any given case, they should be conducting a given amount of inspections?

Peter Kendall: I am conscious that some of the previous questions were looking forward rather than at what had happened. Immediately my view would be, because of what has been learned-and I go back to my previous comment about reputation-retailers have so much to lose that I don't believe this will be an issue going forward, unless in a number of years’ time we become lazy and complacent. My view is that retailers’ reputations are so important that these tests will be relevant tests, and traceability will be demanded as a rite of passage to doing business with the retailers.

Q171 Barry Gardiner: I am sure you are right in the immediate aftermath of this-and of course, if that is the case, the FSA having the power to instruct them or suggest how many tests they should be conducting and so on would not be adding significantly to any regulatory burden there. They would be doing exactly what you said and carrying out those tests themselves. It is more to institutionalise it into the future, if in five or 10 years’ time complacency once again sets back in.

Peter Kendall: You have probably picked up from my previous answer, but as a farmer, I am somebody who is loth to institutionalise inspection and regulation in perpetuity.

Q172 Barry Gardiner: I am doing a good job of pressing you, though.

Peter Kendall: I am very conscious that we need to have the right threat of spot checks, proportional checks on people, without creating an enormous bureaucracy through a very competitive industry.

Barry Gardiner: I think we all agree. Thank you very much.

Q173 Chair: Could I just ask you, however, do you consider the FSA as the policeman? Do you see the FSA as the regulator? Should it be more independent as such, or do you see it as an arm of Government, and should it be brought back into one of the two Departments to whom it reports? What do you think, sitting there as a farmer subject to inspections?

Peter Kendall: I suspect that whatever crisis occurs, Ministers will be summoned to the television screen to answer questions, however much they want the FSA to be independent and intervene. However, the fact that they are independent-and knowing the team at the FSA, they are not the sort of people who will be pushed around by anybody-is very important for us as a farming industry. We do not want food safety and standards to be politicised. One of the reasons we as an NFU were supportive of the creation of the FSA was to make sure this was separated out, but I go back to my point that we should be careful that we do not, as society, becomes more riskaverse, adding burden after burden to everything we do.

Q174 George Eustice: One of the issues that has been thrown up from this is some concern, certainly early on, that bute might have been in quite high concentrations in some of these horses. Although that has subsequently been answered, do you think that there is an issue here, and we need to reconsider the regulations controlling veterinary residues in meat destined for human production? Has it raised any issues there that we should be thinking about?

Peter Kendall: I was generally very pleased with how the media quite quickly came to understand the scale of the problem, and played down some of the early, more extreme concerns around bute residues. I was glad that people understood very quickly what the problem might mean for consumers, and that was quite quickly laid to rest as a concern. The farming industry and beef cattle are incredibly carefully monitored and regulated, and my challenge would be to make sure the rules around horses are equally carefully policed and monitored. We are doing a great job-probably my members would tell me too good a job- on regulating the beef industry at this moment in time. This is a bit of a sidetrack, but I know, when we look at some of the flygrazing that goes on, the movement of horses illegally, that must be an area we need to address. However I would rather horse meat was not getting anywhere near my beef supply chain anyhow.

Q175 George Eustice: To break that down, everyone keeps saying, "Who could ever have thought that horse meat would be entering the food chain?" but what if there was a consignment of meat coming from Poland or A. N. Other country that was using veterinary medicines in concentrations much higher than was allowed? Is there a sufficiently robust testing regime that would pick that much up, or would we have another food scare and everyone saying, "Noone knew this was happening"?

Peter Kendall: I am not sure you can ever police against these very long, multiborder trades in meat, so I remain very concerned that people should have short supply chains and close relationships where food is produced and where it is being processed and consumed. We have heard previously about third-party, distant middlemen. How do you know where horse meat has come from? How do you know what it is being tested for? We do have to have spot checks; we do need to know that the retailers and the processors are demanding those checks, but you cannot rule it out when you are buying from faroff suppliers with whom you do not have a strong tie and relationship.

Q176 George Eustice: Everybody keeps saying that we need shorter supply chains, which is great now. Do you think it is a problem that everyone has become too reliant on traceability procedures, and that it becomes a paper exercise where you tick the box, fill in the label and slap it on, and people have not thought about the much more basic question, "Has anyone seen the farm that this came from?" Is there a danger of that?

Peter Kendall: I think there has been too much focus on price. There has been a drive to tell people that we must meet a certain spec at a certain value, and then if it has the right paperwork with it, it has potentially been accepted as therefore meeting those standards. It is clear that retailers right across the board will make sure that what it says on the pack will be delivered, in future; some of them are already doing a very good job, and some of them are deciding to change the way they do business. We have learned a lesson, and I said this quite publicly last week: the notion that you can get eight burgers for £1 and not be cutting corners has been proved to be one of the real stumbling blocks of this entire process. You just cannot do it.

Q177 George Eustice: That brings me on to my final point, which is about the price. Obviously the beef price has jumped in the aftermath of this. Is it possible that British farmers will increase production to meet that demand? Is there any evidence of that going on? Secondly, can the British beef industry supply the cheaper cuts, the mince? There is a role for lowcost food as well as the premiumend food. Is it possible for British farmers to provide that, or will we always need to import that from abroad?

Peter Kendall: Farmers need confidence. If we give confidence and certainty to farmers, we will see an investment and see a response. I don't think we have seen longterm thinking in the supply chain. We have not seen commitments that are more than "this year" or "this crop". We need that commitment from retailers if people are to make investments. In our offices just down the road, we have had a younger generation brought in for discussion, and a number of them have said to me, "Do you think this creates an opportunity for me to be fattening beef cattle?" I have not yet seen it materialise, but do I think that, given the right signals, we can produce more beef? Emphatically yes, and it is a real ambition for me to see that as an opportunity for British agriculture. Why not create jobs, production and value here in the UK?

As regards the value lines, it is learning to use the whole carcase in a really smart way that should enable us to do that. Most markets now are global. Where we fall down is when we have higher welfare standards-we put stocking densities on our poultry that are not being applied in Holland or Denmark; we put stalls and tethers bans on our pig meat-and we still believe there is a significant amount of pork coming in that would be illegal by our standards. That is one of the challenges I want to make to retailers. I have made it about not just their primary product, but their processed product as well. Is the pork that is coming in legal, by the current EU rules? We cannot compete against that, but given the same level playing field, I believe British agriculture could be up for it.

Q178 George Eustice: I know a few years ago there was an issue that the growing specialisation of dairy herds made them unsuitable for beef production. There was a period where there was a lot of concern about bull calves literally being killed at birth because it was not profitable to raise them for beef. Is that still a problem, or is it now the case that the progeny from dairy herds are raised for that cheaper meat?

Peter Kendall: I am not an expert in every single aspect of the farming industry, but my understanding now is that Tesco have said for their dairy farmers, they must use a bull sire for beef on the cows. The gentleman to whom I was referring a few moments ago who came to our offices has a fatherinlaw who is an Aberdeen Angus breeder, and he says now his bulls are all going to the dairy industry to try to solve that problem and give us more beef animals into the supply chain, to try to recover what Stephen Rossides talked about a few moments ago: the decline in beef production. We need to have the confidence that farmers will keep those animals on and fatten them for a profitable market here in the UK.

Q179 Richard Drax: At present, unprocessed meat products must display a country of origin, but there is no requirement for processed meats to do that. What are your views on the country of origin labelling, and should this apply to processed meat as well as unprocessed product?

Peter Kendall: This is something I have pushed within my job within the European CopaCogeca organisation, for processed meats also to carry a label. We also have to then set sensible levels when that occurs, however. For example, if we have a pizza that might be largely vegetables with a small amount of meat, how do we deal with that, if it has products from a number of areas? We have to set sensible, pragmatic levels: where there is a key meat ingredient, that should be labelled. Some of my colleagues in Europe do not agree with me on that, because if you lived in Luxembourg, for example, and you were running a meat processing plant, you might have product coming in from four different countries within a very small radius around it.

Q180 Richard Drax: So on your pizza example, you are saying you think there is no need for a label on something like a pizza?

Peter Kendall: Again, this is something that is only being talked about now. We would have to have a proper dialogue and consultation about where you set those levels. But if something has a small percentage of the total product as meat, I would therefore say I would not label it. On products that had serious elements of meat, they need country of origin labelling on them.

Q181 Chair: It was put to us in written evidence from the British Meat Processors Association that blanket country of origin labelling could be very onerous to apply. I suppose we would have to get into a definition of what the key ingredient was.

Peter Kendall: I am trying to put an end to promiscuous sourcing from many different countries, and not-very-clear labelling, so if it would make their life harder for doing that, I am up for it.

Q182 Chair: Obviously I represent a very large sheepproducing area, and I have been in France when the sheep come in and are sold. Just as with the beef, as you say, fattened in this country, the sheep are fattened there, and is it not the case that they achieve a higher price per kilo, because then they can be sent to the French? One does have to be very careful, would you agree, as to how the labelling provisions are discussed?

Peter Kendall: Absolutely. We depend on trade, but I still make the argument that we should be able to trade openly, honestly and transparently. I have always said that there is no reason why we should have protectionism in the UK. It is about being clear about labelling and letting people compete in a fair way. In the same way, if I were all about putting barriers up, how would we export 30% of our lamb? That is a message I give to farmers all the time. Let us make sure we are clear, and we win the business on the back of clear and transparent labelling and quality.

Q183 Chair: I know you took an interest in our first report, and just to follow up the question that Barry Gardiner asked, could I just ask: we did conclude that there seemed to be a degree of confusion and lack of clarity, which led to a slow response from the FSA. Would you agree with that conclusion?

Peter Kendall: I am not sure I fully share that. The FSA, from where I was sitting, did respond reasonably quickly. I think if there was anything, it was an understanding of the realignment that had taken place between the Department of Health, Defra and FSA, and who was being asked to respond to what. I would not put any blame at FSA’s door for that response.

Q184 Chair: But to take a hypothetical case that you had been working for the FSA and you had been told that your Irish counterparts were testing certain meat products that were heading our way in November, might you not have instigated testing at that time, in a hypothetical case?

Peter Kendall: I am a farmer, so it is hypothetically challenging for me to imagine working at the FSA. I remain slightly baffled by the different interpretations I have heard about how and when that notification was given about what they were testing for, and what response was required, but again, as I said, I think if anything it was that clarity of whose job it was to do what, rather than a slowness of action from the FSA.

Q185 Barry Gardiner: Mr Kendall, taking up that point about the confusion over whose role it was, and that separation of responsibility that took place, how would you like to see those varying responsibilities allocated to ensure maximum clarity and maximum effectiveness of the FSA?

Peter Kendall: We have always valued, as I said a few moments ago, the clarity of independence of the FSA. If other people are to do jobs that the FSA used to do, as long as they are done really clearly and effectively and communicated properly, then in a world where we are having to make efficiency drives and changes, my concern is that it is done properly, rather than where it is done. That is my real response. The food safety stuff is absolutely critical for us. Of course we are concerned when the origin of the product is being tested as well, but it was the food safety that was absolutely critical. I just need to know that Defra is carrying out the work that it is deemed to be doing, and that was a critical part of that.

Q186 Barry Gardiner: Let me phrase it another way. Do you think it would be better if labelling, composition and safety were, both in terms of policy and in terms of implementation, the responsibility of one body?

Peter Kendall: Looking in hindsight at what has gone on, the lack of clarity about who was doing what has led us to have concerns about the current structures. However, I am of the view that we can make the current system work. That would be my repeated response.

Barry Gardiner: You are not a farmer, you are a politician.

Q187 Chair: I have one final question, if I can crave the indulgence of the Committee while you are here. We have heard from witnesses that Schmallenberg was deemed to be a disease of low economic impact. Would you care to comment?

Peter Kendall: Sorry, low economic impact?

Chair: Yes, on the United Kingdom economy, on our farmer’s incomes.

Peter Kendall: I can take you to farmers-probably in your constituency, Madam Chair-where 40% of lambs have been lost. We desperately need a vaccine; we need it urgently. We want, as an industry, to respond responsibly to find a solution to this, because it is bizarre. It hits one farm and is devastating. It depends on the time of year the tups are going in as well, but it is certainly, to an individual farm, devastating, and I think it will turn out to be of significant economic damage to the sheep industry over the whole course of this year as well.

Q188 Chair: I know there is not a vaccine for liver fluke, but would you say the same for liver fluke?

Peter Kendall: Yes.

Chair: We are very grateful. On behalf of the whole Committee, can I thank you for contributing to our inquiry? I am sure we will meet again in the not-too-distant future. Thank you very much indeed.

Prepared 13th March 2013