Who's to Blame for the Horsemeat Scandal?

The horsemeat scandal has definitely kept the newspaper (and blog!) editors busy over the past week or so, so I felt this an opportune moment to reflect on who is to blame for all this.  Here are those currently under suspicion;

Food Manufacturers, Meat Suppliers, Criminal Gangs, Retailers and the Shoppers themselves….

Well at first glance it is easy to put the blame on the food manufacturers, they are the people who make the product and are therefore responsible for what they put in it, they are goliaths whose main purpose is to make money, obviously if they can replace an ingredient without affecting the taste then it’s all good.  But did they actually buy the ‘meat’ knowing that it was horsemeat, or did they just find a cheaper supplier of the product they normally use?  Of course all this is from the point of view that they were actually saving money, therefore were they just being conned by the second suspect the meat suppliers?  And indeed, were these just part of a conspiracy which involved the third suspect, the criminal gangs?  I’m sure we could continue this by getting further and further away from the main point, which I believe is PRICE.

Actually I didn’t mention Price before, but ultimately this seemingly innocent word is to blame, but surely price isn’t a cause, but an effect in this instance, we really need to find the cause!

So let’s look at who controls the Price.  When we study shoppers and ask them who they think fund the prices and offers in store, they more often than not cite the Retailer.  As we know, most promotional activity is actually funded by the food manufacturers in order to retain or gain market share (Yes, I know I’m simplifying this!). 

Therefore the conclusion is clear; it’s the fault of the food manufacturers with the help of the retailers, they are driving down price!  Well let’s hang on a minute, have the Shoppers themselves got off the hook? Surely they are the ones that are demanding lower prices, causing the retailers to offer the discounts that they in turn have negotiated from the manufacturers?

Well as a specialist researcher into shopper behaviour in this sector, I am loathed to attach any blame to them, yes they want value, but this doesn’t necessarily equate to price alone and although the market may consider they have free choice between retailers, retailer location is a far bigger driver to store choice.

So in the end, I believe that the retailers’ price based propositions are at the heart of the problems we are seeing.  By concentrating their attention on getting the prices down from manufacturers, they are driving down the quality, and in the end that has been compromised.  Retailers in my opinion need to do more to differentiate themselves beyond price comparisons.  Shoppers crave good quality products at a fair price (as a definition of value).  One only has to look at the growth of Waitrose to realise that price is not necessarily the key to growth.