REPUTATIONAL damage among consumers can be devastating. It was widely predicted that Volkswagen would lose massive market share after it was exposed as cheating to cover up the illegally high emissions on millions of its diesel cars. In the event customers have not deserted the VW brand because it is almost certain that, despite what they may say to their friends, the great majority do not really care if their speedy, stylish Volkswagens are pumping out environmentally-unfriendly particulates.
It is a very different matter with the food we eat and the possibility that it could do us harm. Thus the scandal that Brazilian meatpackers have been selling rotten and substandard meat for years is likely to have a catastrophic impact on the Brazilian meat industry and by extension the country’s exports.
President Temer took a group of foreign ambassadors out for a steak dinner this week but it was not a publicity stunt that was about to convince anyone there was no problem. When the UK was hit in 1986 with an outbreak of mad cow disease, the then agriculture minister mounted a similar exercise and not only ate a beef burger himself but fed one to his child. That worked no better than will Temer’s rather desperate gesture. Consumers will vote with their wallets as indeed they did in China in 2008 when local baby milk products were found to be adulterated. The country’s powdered milk industry has still far from recovered. Chinese consumers prefer to rely on more expensive imported products.
Brazil’s serious problems are compounded by the fact that local investigators have discovered that the use of rotten or substandard meat has been going on for years. Producers have found out that they could get away with the fraud and appear to have expanded its use.
This however begs a rather important question. If this racket went undiscovered for so long, it must have been because it never became clear that end-consumers were suffering from eating products, such as corned beef, made with bad meat. In regulatory terms it may have been unsafe but in reality it may have not have been dangerous. Before refrigeration and efficient cooking technology the world had been eating dubious meat and by and large survived the experience.
This is not to say however that encouraged by lawyers, consumers will begin to discover all sorts of ailments and conditions which some medical experts will ascribe with solemn certainty to the consumption of rotten Brazilian meat. Over and above the punishment that the Brazilian authorities will dish out to the meatpackers, there is sure to be a flurry of lawsuits from around the world, not least in the litigious playground of the US courts system.
Substantial damages are likely to bankrupt some of the Brazilian companies, forcing them to close down, with the loss of thousands of jobs. It is going to take many years and cost a fortune in extensive marketing before the meatpacking industry begins to recover, if indeed it ever does.
One way to help rebuild international confidence would be the swift identification, trial and serious punishment of those in the Brazilian meat business who initiated and continued the production of substandard products. Great credit must go to the local inspectors who uncovered this fraud and to the politicians who let them go public. Now the world needs to see the fraudsters pay severely for their crime.