UKs Tesco struggles to survive horse meat scandal

Published: Updated:
Britain biggest retailer Tesco launched a media campaign in an attempt to contain the damage from revelations some of its products contained horse meat.

Taking out full page ads in a number of British newspapers, Tesco apologized to its customers after horse meat was found in some of its frozen beef burgers saying it had withdrawn all products from the supplier in question. The company said it would find out how horse meat ended up in its burgers and promised affected customers a full refund.

Tesco’s products are sold all over the UK at its own stores and also in parts of the Middle East though other retailers.

Prime Minister David Cameron said the incident was ‘unacceptable’ and called for an urgent investigation by the UK’s food standards agency.

The incident comes just one week after Tesco’s CEO said the company’s performance was improving thanks to a one billion pound sterling restricting plan and an increase in sales during the holiday season.

Analysts say the horse meat discovery is a serious blow to Tesco’s reputation and could be damaging for the company’s brand and sales but some say Tesco’s swift response and media outreach could limit potential losses.

“I think in anything like this it is really about damage limitation and how the company reacts to the news and Tesco has reacted fairly well, it’s taken out full page spreads in UK national newspapers basically engaging with their customer base telling them they understand their concern and they are doing all they can to rectify the problem, I think there may be a short term effect on sales but in the long term I think this will be soon forgotten,” said Michael Hewson, Chief Market Analyst, CMC Markets.

The scandal broke out earlier this week when an investigation by the Irish Food Safety authority found traces of horse and pig DNA as high as 29% in some cases, in products labeled as ‘beef’ sold at retailers in Tesco.

The products in question came from Irish and British suppliers who are thought to have mixed horse meat with beef.

Experts say that while horse meat isn’t a health risk, the incident raises serious issues of fraud because the labels on the products didn’t declare horse or pig DNA and it appears as though cheaper meats were being substituted for more expensive ones.

The revelations also expose a failure on the part of the regulators to spot the contaminated meat before it hit the shelves, raising serious questions about food safety.