Monday, 4 March 2013

Horsemeat Scandal, H&S and Reputational Risk


So I thought I’d jump on the bandwagon (get it?) with this one, not because I claim to be an expert in the food industry, or know the 101 on operational processes within food processing/distribution etc etc., but because I am a consumer, faithful follower, curious risk taker and my trust has most definitely been broken and now I have become suspicious!

Let’s break it down now.

Issue 1 : Health & Safety :

 Okay so about 100 articles floating around the internet  and  it really boils down the fact that there is "limited public health risk" – As stated by The UK's chief medical officer, Dame Sally Davies. But let’s forget about the bio stuff and go back to proper health and safety. It’s not that horse meat is forbidden. OK , so it’s not the social norm. But that’s not the point really. A lot of tests found these meats contaminated with painkillers phenylbutazone or bute.  This really is just what has been found now. What happens when more tests are done? What about those horses sent to slaughter houses who have been injected with drugs , for example to enhance their performance on the racetrack? What will the consequences of consuming meat injected with various steroids/drugs have on our very own health and safety?

It is a scandal because it’s not the norm, the public have had the ‘wool pulled over their eyes’ and what comes out of this?... Issue 2.

Issue 2: Reputational Risk

I’m not going to dwell into reputational risk models and such because this really is more like a crisis reputational risk. At this time, how many companies are going back and digging in to find their policy on such issue?  (More on this in another post)

·         Legal issues, Deception and Lack of trust

In a nut shell (or horseshoe) it’s about issues of mislabeling and fraud.

I saw a show briefly on food network on how value foods are produced with highest care quality for  supermarket chains and all the efforts in removing the view that buying brand value goods is a bad idea now seem to be diminishing like a fun  game of the domino effect.

Other companies are slyly pushing produce of their shelves but getting caught too.

The need to build back that trust of loyal customers is essential. Your reputation is at risk. One person really does make a difference in a room, and so will once person not committing to buying your products for their lifetime.

Issue 3: Audit process

The auditors are coming.  Then panic strikes. We have all faced it in our work environments. Every department is a temporary chaos (doesn't matter what industry)
Somewhere down the line, that moment is going to crop up in where the horse meat came into the food chain.  Many companies having documented process may cease to exist. This is by far an area which is going to get heavily scrutinized.
Get there and fix it before they come in and pour water over all the efforts you have made to protect your companies’ Reputational risk, because after all,

 It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.   -Warren Buffett


   (Jumping off the bandwagon for now and RISKercizing until next time!)