Monday, 6 July, 1998
TWO of the countrys biggest renderers may take legal action after an independent report accused them of making high profits out of the BSE crisis.
The report, prepared for Tesco by consultants London Economics, cleared supermarkets of profiteering from the collapse of farm-gate beef prices in the wake of BSE. It said the increased gap between farm-gate beef returns and retail beef prices was instead largely due to renderers – some of them named in the report – passing on the cost of post-BSE legislation.
Company officials at Prosper de Mulder, the biggest renderer in England and Wales, are now examining the small print of the report before deciding whether to sue its authors.
“We are considering whether to take legal action,” said Paul Foxcroft of Prosper de Mulder. “We will take a considered opinion and will go through the report very carefully.”
Representatives of William Forrest & Son, the biggest renderers in Scotland, are also examining the report before deciding whether to take legal action.
The report says that the monopolistic nature of the UK rendering industry meant renderers passed on BSE-related cost increases to their customers without losing business.
“Everyone bar the renderers suffered,” the report says. “Prosper de Mulder, in particular, has a reputation for aggressively protecting its market.”
Simon Trussler, senior consultant at London Economics, said the report could have been more accusatory but it was in nobodys interest to cause problems along the beef supply chain.
“We have said that renderers kept making high profits after BSE but there is no evidence that those profits actually increased to excess levels,” Mr Trussler said.
The UK rendering industry has been cleared of anti-competitive practice on three separate occasions following investigations by the Monopolies and Mergers Commission. Prosper de Mulder and William Forrest & Sons control about 60% of the UK rendering market.