Scandal begins second century in Australia

Press, 15 February 1982, Page 46

Scandal begins second century in Australia

By

HUGH STRINGLEMAN

Amid the uncertainty of future access to the United Kingdom lamb market and the unsatisfactory but apparently necessary supplementary minimum payments, the New Zealand meat industry could still spare a thought for its embattled older brother across the Tasman Sea.

If the birth of a country’s meat industry is taken as that first expansionary frozen meat shipment, then the Australian industry is about two years older than New Zealand’s. The S.S. Strathleven left Sydney on November 29, 1879, with 40 tonnes of freshly frozen beef, mutton

and lamb for the United Kingdom.

The 2,500-tonne iron-sided Strathleven had been chartered by a Queensland grazing syndicate headed by Andrew Mcllwraith and Malcolm McEachern, whose names are still carried by a firm of meat traders in Sydney. The ship took 66 days to reach the U.K. but the newlydesigned dry-air refrigerating plant which burned 3 tonnes of coal a day, kept the product in good shape. It wasn’t the first attempt to ship frozen meat from Australia to the U.K.

Some thirty years before, Mr James Harrison of Geelong, Victoria, a printer and publisher, had attempted to

ship beef and mutton using equipment from an ice-plant he ran in Geelong. The equipment failed and the shipment had to be dumped at sea.

Also in 1876 the famous Thomas Sutcliffe Mort, founder of a huge pastoral company in Australia, planned a frozen meat shipment but the equipment broke down before the ship left and it sailed without the meat.

The Australian export trade in meat was around 790,000 tonnes for the financial year ended June 31,1981. It consisted of 498,000 tonnes of beef, of which 296,000 tonnes went to the United States. 50.000 tonnes of offal and 242,000 tonnes of sheepmeats. As well some 6 million sheep left Australia live bound for slaughter in the Middle East. Australia now has 127 million sheep and 25.2 million cattle.

Up to the 1880 s sheep had made their mark on the Australian countryside, but the export of their products was limited to wool, skins and tallow. Cattle were grown only for domestic consumption.

Now it is the beef industry in Australia that is attracting all the attention and regulation and it is the general downturn in that industry, exacerbated by some especially gloomy, spots, that has led to meat company failures in recent years. But it should not be assumed that just because the processing side of the Australian beef industry is in bad straits the beef producers must be doing well. Admittedly this has often been the case in the past

But if the farmers of Australia’s 25 million beef cattle had been told back in the gloomy mid 19705, when beef was being flogged to any overseas customer that even hinted at an interest at prices as low as 25c a lb f.0.b., that in 1982 when the herd had been reduced by over 8 million cattle, prices on the dominating United States import , market would be where they are today, they would have quit beef in their thousands.

They did quit beef cattle in their thousands during the gross beef oversupply period from 1974 to 1978, when cattle lost their allure as a quick way to riches. But those who hung on, probably more out of. necessity than out of choice ,on a good deal of the arid Australian continent, had every expectation of much better prices when the oversupply was reduced throughout the world.

Now the price of Australian beef to the United States is around three times today what it was during those years of ridiculous: prices, but the current level is by no means an adequate return. It has become apparent that the average American is not as fond of hamburger these days as he once was. And the prospect that he has been eating a little horse and kangaroo with his beef will not fill him with confidence in the übiquitous hamburger. What an irony that the misnamed hamburger, supposed to contain all beef but certainly never any ham, having been the agent of the dramatic expansion of the Australian beef industry since the 19505, should now be the medium of a huge food confidence trick, a sort of horse swindling on a massive scale. Like the New Zealand meat industry, the Australian industry started with shipments of frozen sheepmeats to England. The two world wars gave considerable impetus to meat exporting and during che 1950 s Australia, like New Zealand, still sent the bulk of its frozen meat to the United Kingdom. While the volume of sheepmeats generated by a national flock of over 120 million obviously must be considerable, the production of meat has never been the prime purpose of keeping Merinos in Australia. Several shearings of fine wool during the life of a wether bring much more money than the carcase. Consequently Australia has put more effort into finding and developing markets for beef than sheepmeats. But the beef trade which has been developed with the United States to the extent of over 300,000 tonnes a year, like the disposal of the lower quality sheepmeats to Eastern Europe and South East Asia, is based on the lowest common denominator of product. As the eating of hamburgers became a national pastime in the United States the production of lean meat trimmings in that country was inadequate to meet demand.. ■ The prime, grain-fed cattle from the feedlots of Colorado

and Kansas generate belly trimmings containing 50 per cent fat but the United States food regulations stipulate that a hamburger must contain 80 per cent lean beef. A lean meat must be found to mix with these fat trimmings. During the 1960 s and 1970 s the United States importers looked to Australia and. New Zealand to provide this, lean meat.

Quality is largely unimportant, but a leanness of 85 per cent or 90 per cent is essential.

Most of this manufacturing grade beef goes in frozen “slash-pack” cartons from boning rooms in Australia and New Zealand to processing plants in the United States where it is mechanically combined with domestic meat and pressed into hamburger patties, turned out by the millions daily,

There are a number of elements in this chain which have enabled the Australian horse and kangaroo meat confidence trick to be played. * Private boning rooms, not attached to abattoirs, appear to have been the best places for meat substitutions. * Meat of any sort when slashed by the boners and slicers from the carcase and then frozen in a block of lean meat is very difficult to identify without chemical analysis. * Once sealed in the 27.2 kg carton and sent by the million to the United States it is obviously physically impossible for Australian and United States authorities to be certain of the contents of every carton. ‘Mechanical mixing and pattie forming further disguises the original texture and flavour of the constituent meats until homogeneity of taste prevents an American from detecting that he is eating horse or kangaroo. The ability to perpetrate such a massive and long term fraud may have been dependent only on these factors of the industry as it has developed, but many in Australia believe bribery and corruption on both sides of the Pacific Ocean must also have been necessary. A Royal Commission in Australia is attempting to ascertain the extent of meat substitution and who was involved and at least one meat exporter has been charged. The supervisory role of the Commonwealth Meat Inspection Service of the Australian Federal Government has been drastically overhauled and many new regulatory measures introduced.

Meat inspectors must now be present every time a cold store is opened, a boning room operated and export meat is handled. The Australian Minister for Primary Industry, Mr Peter Nixon, and the Chairman of the Australian Meat and Livestock Corporation,

Mr Geoff Jones, have made placatory trips to the United States to try and minimise any danger to Australia’s beef trade from the scandal. But the crisis of confidence has come at a bad time for the future of Australian beef exports to America, and for the future of Australian cattlefarmers. A massive effort at diversification away from the United States market in the mid-1970s identified and served a number of large potential importers of beef in Africa and Asia. But these markets, because they could only buy beef when it was really cheap, have now largely disappeared from Australia’s exporting.

Australia is now back to the situation whereby the United States takes over 60 per cent of all beef exported. While not forgetting the United States counter-cycli-cal import legislation which may begin to bite into Australian exports in the mid to late 1980 s, it appeared to suit the Australian industry to let this reliance on the United States go on without effort during the late 1970 s and early 1980 s.

As mentioned, it was expected that the light at the end of the tunnel of desperate prices in the mid 1970 s would be the United States market, as indeed it had been the best-priced market right through the gloomy days.

In July 1978, the United States President, Mr Carter, acted to allow a substantial tonnage of imported beef into the United States in excess of the quota for that year.

The Australian meat industry was jubilant and one national newspaper cartoonist pictured the Deputy Prime Minister, Minister for Overseas Trade and Leader of the National Country Party, Mr Doug Anthony, jumping up and down saying: “It’s been so long since we’ve had a decent order I’ve forgotten what one feels like.” But while beef prices were low, and there was an excess of the meat being produced, it was not worth anyone’s while to adulterate with expensive horse and kangaroo. As soon as beef prices began to rise beyond the prices of knackery horse flesh and field-shot kangaroo the potential for such a substitution as has been discovered was created.

Kangaroo meat has been butchered in the wild and sold on the domestic market for pet food for many years. It is a very dark and gristly meat with a distinctive smell when cooked.

Horsemeat also can be readily identified from beef when in the raw, unslashed state.

Both products are now required to be “denatured” with an edible dye, purple, blue or yellow, at the point of production in all States. But until the latest scandal this has not been law for kangaroo meat and, it appears from evidence given to the authorities once the scandal broke, operators were getting knackery horse without the dye so that it could be mixed, with the boning room beef. - . >;■

Many countries prize the horse as a delicacy but the American would recoil from eating one of man’s best friends. There has also been a substantial lobby against the importation of any kangaroo products into the United States because of supposed genocide in Australia of the lovable and unusual kangaroo. In other words, if Australia had wished to find the meat of two animals with which to adulterate its ex-

port beef to the United States and severely disrupt trade it could not have picked a more disruptive pair. The whole fraud could not have been better designed to appeal to the public mind and raise feelings of disgust in Australia and the United States.

A concurrent revelation in New South Wales that some dairy farmers were adding lactose (the milk sugar) to their milk to make the solids not fat level acceptable barely raised eyebrows in farming or urban communities because lactose to milk is nothing like horse or kan ; garoo to beef. The Royal Commission will drag on for many months to come. Trade with the United States has slowed to a trickle and it is difficult to gauge the effect of the substitution scandal. It is the job of the corporation to remain calm while everyone is clamouring. The revelations before the Royal Commission will maintain the level of clamour for many months to come. So spare a thought for the Australian meat industry as the New Zealand industry celebrates 100 years of exporting.