Horsemeat scandal: Can brands like Findus recover?

Horsemeat is a tough sell, even for the the most revered advertising executives.

In the US TV series Mad Men, 1960s ad man Don Draper is asked what a client should do when its popular brand of dog food is found to contain horsemeat - much to the disgust of its customers.

"Change the name," he says. "The name has been poisoned."

Amid the current horsemeat scandal, the question is whether names like Findus are now toxic.

Findus is the most prominent brand so far named in the scandal, which has linked big-name supermarkets in the UK and France to abattoirs in Romania via meat suppliers in Ireland and Cyprus.

The frozen ready-meal maker has been a firm fixture in the UK for more than 50 years, and the company had global sales of more than £1bn ($1.5bn) in 2011.

Those sales are likely to plunge in the aftermath of the scandal.

Its beef lasagne has been taken off the shelves after being found to contain up to 100% horsemeat, and analysts warn its wider sales of processed meat will suffer.

'Knock-on effect'

"It's not just Findus that is going to suffer here, it's the processed beef brand more generally," said Vince Mitchell, professor of consumer marketing at Cass Business School in London.

"We are increasingly trusting supermarkets when we buy processed meat, so that failure of trust will mean a knock-on effect. That is where the damage is to come."

But branding experts say the future of Findus depends on how the company responds the fallout of the scandal.

Shailendra Kumar, founding partner of the UK-based branding agency Equilibrium, said apologising should be an important part of the company's response.

"The situation is recoverable," he said. "As long as they put out their message of contrition and are seen to be acting on it, they will recover quite quickly."

If this is done effectively, he said, the scandal should not bring the Findus brand down.

"Of course there has been some damage to the brand, but they are a big brand in the food industry," he added.

"It's a bit like the Perrier scandal - they found benzene in the water but within a year their market share was back to where it was."Benzene was found in bottles of Perrier mineral water in 1990, forcing the recall of 160 million bottles from markets worldwide, and provoking criticism of the firm's handling of the situation.

'Established name'

Prof Mitchell argues that it is the handling of the crisis, rather than the crisis itself, that will affect whether consumers continue to trust the Findus brand.

He pointed to the BP Gulf of Mexico oil spill in 2010, when chief executive Tony Hayward was roundly criticised for his slow response.

"People do forget. In the BP crisis what sticks in people's minds is not the specifics of the disaster, but the way the company responded to it."

The fact that the horsemeat is not believed to be harmful is a blessing, analysts say, and should limit much of the reputational damage. Findus initially described the horsemeat problem as simply "a labelling issue".

Other brand experts argue that the horsemeat scandal is simply not grave enough to hurt Findus, with its long history in the frozen food market.

"It's a very established name that's been around for a long time. I think it will take time, but I think they will get over it," said Stephen Izatt, managing director of the brand consultancy Thinkfarm.

"They have to be completely transparent now, they have to lay out what they have done and convince people that they have learned from the experience."

Horsemeat scandal: Romanian abattoirs 'not to blame'

The Romanian prime minister has denied allegations that two abattoirs in his country sold horsemeat purported to be beef to European food companies.

Victor Ponta said checks had been carried out and there had been no breach of rules and standards.

The abattoirs had been linked to the contamination of processed meat products sold in Europe.

UK Environment Secretary Owen Paterson said he spoke to his Romanian, Irish and French counterparts on Monday.

He hopes to meet them and the European Commissioner for Health and Consumer Policy Tonio Borg later this week. He is due to update the House of Commons on the scandal on Monday evening.The discovery of horsemeat in beef products has led to processed food being withdrawn from sale in Britain, France and Sweden.

Mr Ponta expressed anger that his country had been blamed.

"From all the data we have at the moment, there is no breach of European rules committed by companies from Romania or on Romanian territory," he told a news conference.

"I am very angry, to be honest."

In France, the government has summoned meat industry representatives for crisis talks. Seven French supermarket chains have already withdrawn frozen ready meals made by Findus and food supplier Comigel.

An initial investigation found the meat originated from Romania. French investigators have visited two companies involved in the import and processing of meat to try to establish at what stage the horsemeat was labelled as beef.

The UK government says that an "extensive" criminal conspiracy may have taken place.

Mr Paterson told the BBC: "This is a case of fraud and a conspiracy against the public, this is a criminal action, substituting one material for another."

Legal action is set to begin in continental Europe on Monday and his European counterparts were agreed that this was a case of fraud, he said.

'Unwelcome news'

The controversy surrounding contamination of meat products has also affected firms in the Irish Republic and Poland.

Last month, Irish food inspectors announced they had found horsemeat in some burgers stocked by a number of UK supermarket chains, including Tesco, Iceland and Lidl.Mr Paterson told the BBC a factory in Luxembourg, which has been linked to the French cases, had to issue warnings to 16 different countries. He said he did not know how widespread the problem was but "we have to be prepared for more unwelcome news".

Tests were continuing and it was the responsibility of the retailers to "convince their consumers of the validity and quality of their products", he said.

Mr Paterson added that the Food Standards Agency's (FSA) advice was to continue buying and eating processed beef products, but if any evidence of a serious threat to health emerged "we will act very swiftly".

The FSA has ordered food businesses to conduct authenticity tests on all beef products for significant levels of horsemeat and the deadline for the first set of results is Friday 15 February.

Last week Findus UK took its frozen beef lasagne, made by Comigel, off the shelves after some were found to have up to 100% horsemeat in them.

Findus UK said the only product on sale in the UK using ingredients from the French supplier had been its beef lasagne and all other beef products on sale in the UK had been DNA-tested and cleared.

The FSA has asked Findus to test their contaminated beef lasagne for the veterinary drug phenylbutazone as animals treated with "bute" are not allowed to enter the food chain. The results are expected in the next few days.

The Chief Medical Officer for England, Dame Sally Davies, said: "It's understandable that people will be concerned, but it is important to emphasise that, even if bute is found to be present at low levels, there is a very low risk indeed that it would cause any harm to health."