Beefy sales let meat industry off the hook

Less than three weeks after scientists revealed the strongest evidence yet of a link between BSE and its human version, Creutzfeldt-Jakob Disease, Tesco announced sales of fresh beef were back to their pre-BSE crisis levels (MW November 8). Sales had previously fallen by more than 50 per cent.

Few could have predicted such a remarkable recovery of confidence in the eight months since March 20 – Black Wednesday – the day Health Secretary Stephen Dorrell stood up in the House of Commons and admitted a possible link between the animal and human diseases.

Beef sales plummeted. Supermarkets were virtually giving the stuff away. Fast-food chains and manufacturers such as Nestlé fell over themselves in their rush to tell consumers they were only using imported beef.

So what has happened to bring about this apparently incredible turnaround in confidence, overcoming even the bleak fact that 14 people have so far died from CJD? Has the marketing been so effective that it has restored confidence, or is it more to do with a collective consumer amnesia?

Tesco, Sainsbury’s and Asda all report a slow but steady recovery since March. Sainsbury’s says sales are up to about 90 per cent of what they were, Asda says they are already back to normal. But they refuse to reveal the level of pre-BSE sales.

According to Chris Lamb, marketing manager at the Meat & Livestock Commission (MLC), the simple, crucial factor was that none of the British retailers gave up on beef.

“The retailers could have walked away from beef,” says Lamb. “They could have said we want to halve our orders tomorrow. But they didn’t. Apart from the silly season in March and April, when prices were halved just to clear out the supply chain, they continued to support beef and promote it in the normal way.

“There was a readjustment phase when everyone was guessing from day to day what their level of orders should be. But it soon got back to a relatively normal situation, with the supermarkets maintaining their price, maintaining their displays and maintaining their levels of supply. They recognised that beef is a very important part of the British psyche.”

Retailers also recognised that they were in a no-lose situation. Tesco now admits that the BSE crisis did not cost it any money. In fact, it has probably made money because of higher prices charged on alternative meats.

So while Asda pushed its support for British beef to jingoistic heights – banishing foreign beef (reputedly up to ten per cent of normal sales) and hanging Union Jacks in its stores – the others kept quiet and made money.

Publicising the fact that beef sales are back to pre-BSE crisis levels has added to the impression of complete recovery. But as the MLC admits, it is due to fewer consumers buying a bigger volume.

Beef prices are largely static compared with eight months ago, while the price of chicken, lamb, pork and turkey has gone up significantly. “With the levels of price increases, the retailers are laughing,” says one observer.

And across the beef industry – where total volume sales are about 85 per cent of pre-BSE crisis levels – some areas are still well down. Sales of beefburgers, for instance, are 46 per cent down year on year, prompting the MLC to launch a beefburger quality standard, as it already has done for mince.

A Tesco spokesman admits the retailer has not lost any money because of the BSE crisis. The wholesale price of British beef is down 17 per cent because of the ban on exports (from 120p per kg to 100p per kg). Also, the retailer no longer buys from abattoirs in the Irish Republic, where there is no such ban, and beef is in greater demand.

Tesco has set up procedures post-BSE to ensure greater traceability in its beef supply chain. The company spokesman says: “We always knew there was an issue about the supply chain in meat because of the diverse supply route, unlike for example with vegetables. Since the BSE issue and the ban on exports, farmers have had to adopt the marketing disciplines we want because they no longer have as many sales outlets.” A tacit admission that retailers have used BSE to strengthen their hold over suppliers.

“People have seen that the streets aren’t full of bodies. This is about returning confidence rather than price. Price has sped things up, but price alone won’t make people switch back to beef,” the spokesman adds.

Lamb refuses to reveal what proportion of the buying public is still avoiding beef. But he admits that the next marketing dilemma surrounding beef is whether to put across broad messages for a big audience, encouraging more people to buy more, or whether to target sections of the public, such as mothers with young children, which still refuse to buy it at all.

An overriding conclusion from the MLC’s 70 consumer discussion groups held since March is that people simply want a return to normality. And that is what Tesco has capitalised upon.

“The consumer is totally bored with BSE. After something has been said once, the story has to be developed to keep more news coming out. But if it is not really saying anything new, consumers are going to switch off,” says Lamb.

So as the British beef industry undergoes a far-reaching restructure, with animals traceable from birth to table, collective consumer boredom – or even partial amnesia – is still one of the industry’s most potent weapons.