Frozen meat meets the criminal world

Food fraud in the EU, an ever closer conspiracy?

Deep fill, deep trouble!Deep fill, deep trouble!
The story began being labelled as the horse meat scandal. But much as part of this problem seems to be the easy way food labels can be changed it's now changed to 'food fraud'. Over at EUReferendum - Richard North is perhaps the best placed person in the UK to deal with this subject. He's not only in general terms politically minded but also an expert on the workings of the EU. This is vital as the scandal happened on the EU's watch. North is technically qualified too, he, unlike many of the journalists now writing about this subject, does not need to rush to Wikipedia to help him understand the science.

The EU spews out an enormous amount of law. Even if you think the EU is the most wonderful political confederation on earth it cannot be overlooked that in this case the amount of law has not prevented a colossal fraud and, despite assurances so far that human health is not at risk, the public have lost a great deal of confidence in the food industry and the regulators. It remains to be seen if their confidence in the political oversight in the UK holds up.

Food adulterated for profit is not a new problem, it was endemic in the Victorian era. The social reformers of that age would be shocked to see it still goes on today. Back then the huge levels of import and export of food we see today would have been not only impossible but undesirable. The single market of the EU is presented both as an achievement and beyond reproach. But it is the reason food of dubious quality can be so profitable.

Today were told we must 'go green' and yet frozen meat, like other food, is moved from the furthest corners of Europe to the UK. It would make sense if the UK had no farms and we were starving, but this is not the case. The not inconsiderable cost of transport is offset by the only possible way out of this conundrum, introduce a scam. The economics are otherwise not viable, however, it's only now this has become obvious to the authorities. Small wonder the public have little faith in the political process.

When the financial crisis struck it soon became clear that the mighty banking industry had been fooling us for a long time. It was soon revealed that the banks were not victims but were the perpetrators. They had caused the problem due to their incompetence. Then it became clear that the EU was determined to use the crisis as the reason for a power grab. Will we see a re-run of this with food fraud? At the moment it's hard to see that happening.

For many people would say the EU did not 'solve' the financial crisis so it would not appeal to them for the EU to take a bigger part in the food fraud solution. But that's the rational approach and the EU is anything but rational. Also as the law stands the bulk of the responsibility for food fraud lies with the food companies. However, when we see that the regulators are behind the curve and must follow EU law it takes us back to the problems of the single market and it makes clear that the consumer, the public, are the losers here yet again.

When the banks failed to do their job few top bankers lost their positions and large bonuses continued to be paid. In effect the public paid for the clean up when the government stepped in with the rescue package. The public must be wondering if they now have to do the same again for the food industry and pay up. The EU makes a lot of noise about consumer protection but that's all. For the food industry is simply another giant pressure group that lobbies to frame EU legislation to suit its own interests. It's very successful too, small wonder then the regulators, in the case of the UK the FSA, who follow EU law are so flat-footed.

But there's more to this saga than food fraud. James Quinn looks at the owners of Findus, one of the big brands caught up in the meat side of all this scandal. The point made by Quinn is valid, namely that the owners of companies cannot just take profits and keep quiet. If they want the money then they have to accept the responsibility too.The financial crisis brought the shadowy world of private equity into sharp focus and the public did not like what they saw. Neither did the rather theatrical John McFall, the Labour MP who chaired the influential committee at that time. Quinn reminds us that he barked incredulously at the leaders of the UK private equity industry -

“You’re the masters of the universe … I’m asking how much capital gains tax you pay and you cannot tell me?”

Well things have changed since then, the private equity people crept back into total darkness leaving the bankers to take a bashing from the public while the expenses' claims of some MPs took the reputation of the House of Commons to the lowest it's ever been. So McFall was lucky to have been able to dish it out to the private equity people when he did. According to the Telegraph -

John McFall: second home in London. Claimed monthly mortgage interest of £850 in 2006, which rose to £1,000 in 2007. Made regular maximum monthly £400 claims for food

It remains to be seen if the owners of failing food companies are forced yet again to take the glare of the spotlight of an investigation; or do they hide behind their managers? The problem for the owners now is that their shadowy world looks to be on a level with the criminal world behind the food fraud.