(Updates with Tesco response from first paragraph.)
Feb. 27 (Bloomberg) -- Tesco Plc, the U.K.’s largest supermarket chain, said it’s examining “all aspects” of its supply chain after horse meat was discovered in some products labeled as beef, while a survey of British shoppers showed demand probably will increase for locally sourced food.
The company will purchase all of its fresh chicken from U.K. suppliers from July with a goal of sourcing all chicken meat from within the British Isles, Philip Clarke, Tesco chief executive officer, said today in a speech at the National Farmers Union annual meeting in Birmingham, England. All of the company’s beef, including frozen and ready meals, already comes from the British Isles, he said. Tesco is setting up an independent panel to examine its supply chain and plans to offer minimum two-year contracts to farmer suppliers, he said.
Burgers at Tesco were found to contain horse meat in mid- January. Since then retailers across Europe removed frozen burgers, lasagnas and other beef products from shelves. In an NFU survey released today, more than 86 percent of U.K. consumers said they are as likely or more likely now to buy traceable food sourced in the U.K., and 78 percent said retailers should sell more domestically produced food.
“Over the last six weeks it’s been a wake-up call for the industry,” Clarke said. “For many years, the way retailers have sourced food has become too complex.”
Less than 1 percent, or 35 of the 3,634 DNA tests completed so far by food businesses and the U.K. Food Standards Agency, have come back positive for horse meat, Owen Paterson, the secretary for the Department for Environment, Food & Rural Affairs, said at the meeting. Tesco is “implementing unprecedented DNA testing programs on all batches of processed beef,” Clarke said.
Tesco may absorb the cost of testing products for horse meat, Clarke said today in an interview on BBC Radio 4’s Today program. Consumers in the U.K. may not pay higher prices for food if the company can save money by eliminating some suppliers or sourcing more meat locally, reducing transportation costs, he said at the meeting today.
Spanghero SAS, the French meat processing company that the government has said shipped horse meat as beef, said today it filed for creditor protection. Spanghereo had bought the frozen meat from a Cypriot trader, which subcontracted with a Dutch trader that sourced the meat from a slaughterhouse and meat processor in Romania, according to France’s consumer and anti- fraud office. Spanghero has denied wrongdoing.
“We need shorter supply chains which source from British farmers and growers,” NFU chairman Peter Kendall said. “We now need supermarkets to stop scouring the world for the cheapest products they can find and start sourcing high-quality, traceable products from farmers here at home.”
--With assistance from Gabi Thesing in London and Rudy Ruitenberg in Paris. Editors: Claudia Carpenter, Sharon Lindores