Horsemeat: are private equity and Italian meals a trend? – City
Analysts Clive Black and Darren Shirley asked: “Are private equity owned businesses – that is Bird’s Eye and Findus – so focused upon financial engineering and returns and is its ownership in not being a participant of the food industry and so proprietary in nature, a factor explaining why brands have let down their customers and consumers?”
Black and Shirley also expressed surprise that proprietary brands were “among the most implicated lines” in the horsemeat scandal. Such brands should be considered “a reasonably precious item” to a company’s management with appropriate controls in place. “We also make this point because most criticism in relation to this contamination seems to be targeted at the supermarkets and not the branded manufacturers,” they added.
Italian prepared lines
Commenting on the latest test results from the Food Standards Agency, Shore Capital expressed surprise that another batch of Italian prepared lines – Bird’s Eye Traditional Spaghetti Bolognese and Beef Lasagne – had been contaminated. The withdrawal followed the removal of similar products from Findus and Asda own-label bolognese sauce produced by Greencore.
Black and Shirley asked whether the crisis that “may be showing signs of settling down in general may perpetuate for the Italian prepared food segment with a switch into unprepared meat and pasta”?
Such a shift would “take a little edge off the likes of Greencore’s sub-category demand”. On the other hand, but may boost Bakkavör, with its fresh pasta activities and the Hilton Food Group.
