Tom Watson – Labour MP for West Bromwich East called the revelations that Findus was using beaf product contaminated with horse meat as ” …probably the most perfect piece of predatory capitalism I have ever seen.” (Birmingham Mail) He believed that the Private Equity group that manages Findus is in fact responsible for driving down the prices they pay and in effect collapsing the supply chain.
The private equity companies have been seen as having very few scruples when it comes to profiteering from companies, the were recently accused by a parliamentary sub committee of not paying taxes and in the case of Findus creating a very opaque structure of ownership removing any personal morals or ethics. (Telegraph)
But is Tom Watson right? Can we rely on businesses managed by private equity to exercise sufficient ethical management and deliver the quality and standards customers expect -particularly in the food market? I have to agree that the pressure to produce returns for investors is now so great that without strong regulation we can no longer rely on remote managers making the right decisions for the public as a whole. We have seen the same immoral behaviour bring down the banks and now similarly in the food industry and there must be many of us wondering if this is just the tip of the iceberg. How can we as consumers really know what is being used in processed foods if the supply chain is so complex and we allow products such as ‘mechanically retrieved meat’ to be added to pies, sausages and burgers?
Adulteration of food for profit is as old as mankind, but today it is apparently being carried out by food producers to create profits for their shareholders and inflicted on those that are relying on low cost items to include meat their diets. I would suggest that this is a foreseeable consequence of capitalism in a world without boundaries and where seeking profit is put above social, moral and ethical responsibilities. As food production became commercialised governments have had to regulate, bakers were stopped adulterating their flour and from giving short weight -a bakers dozen, 13 rather than 12, was to ensure fair weight was given. German brewers had to adhere to strict purity laws and their beer is seen as the best in the world and in the UK major brewers are loosing market to the micro brewers making traditional beers. So delivering good quality food to the consumer is possible and profitable – but not profitable enough to pay massive premiums to share holders. Socrates told us that there is good an bad use of money – investing money in the means of production to provide goods or services was good, while lending money to make more money – usury, was bad. When markets were smaller and more active no one player could make a super profit – but today markets are dominated by a few big player, oligopoly, so companies can see the potential for earning abnormal profits and that appears to be their sole aim – not to meet the needs of their customers.