Northern Foods Plc: Corporate Crimes

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Northern Foods Plc.

 


Corporate Crimes

  1. Undue political influence in determining the future of farming
  2. Promoting an unsustainable model of agriculture solely to suit the needs of Northern Foods
  3. Selling unhealthy overpriced food
  4. Exploiting small farmers – the case of Express Dairies
  5. Supporting the intensive factory farming of animals
  6. Supporting Genetically Engineered Foods
  7. Conclusion

 

1) Undue political influence in determining the future of farming

"…a decision to place Haskins in charge of a "rural recovery plan" is akin to asking Lady Thatcher to head a task force on the future of the coal industry. Lord H has already made it clear what he wants: mergers of dairy companies and bigger, industrialised farms, geared up to provide the bigger food manufacturers with everything on a plate"[41]

Haskins is very much part of the new Labour drive to ignore democratically elected Parliament and move towards a US presidential style of government, advised by an unelected body of task forces headed up by corporate leaders. His unthinking outspoken and unsympathetic style has won him enemies from both the right and the left. However, those who know him claim he is charming and affable, and cite his early membership of CND and the African National Congress as examples of his humanity. Now that his report on the future of British agriculture has been published, tens of thousands of small farmers think differently.

Insiders had laid odds on Haskins chairing up the promised ‘Policy Commission on the Future of Farming and Food’ -charged by the Government to come up with ‘a plan to develop a sustainable, competitive and diverse farming and food sector’ by December 2001. Instead they appointed Sir Don Curry, best known for his highly criticised role in the BSE scandal as head of the Meat and Livestock Commission; perhaps the PM thought giving Haskins this position would show too obvious a conflict of interests.

The report is, in any case, likely to concur with both Haskins’ and the Government’s thinking on the future of farming. The terms of reference for the Commission are crucially limited by its need to be ‘…consistent with the Government’s aims for Common Agricultural Policy (CAP) reform, enlargement of the EU and increased trade liberalisation.’ In any case, Haskins is pulling the strings on the UK CAP reform policy by presiding over a paper from the Foreign Policy Centre, a respected ‘independent’ think tank (see earlier section on Other Political Projects). This is likely to see a transfer of subsidies to farmers, away from production and to be more linked into conservation. What this will not tackle is the fact that supermarkets and processors pay so little, sometimes below the cost of production, that many farmers have become reliant on these production subsidies to make a living. If subsidies are removed without ensuring that farmers are paid a fair wage, small farmers will not be able to survive.

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2) Promoting an unsustainable model of agriculture solely to suit the needs of Northern Foods.

Northern Foods are the supermarkets’ dream. They supply cheap processed food, which apparently the British public wants. They are efficient, even owning their own distribution company, NFT. And there isn’t a whinging small producer in sight. This is a US-style hi-tech vertically and horizontally integrated manufacturing business: the messy issues of farming and cooking don’t come into it. And this model of agribusiness is likely to prevail in the UK. As Haskins himself has admitted, it will be a "beneficiary of a big shake-up of the food industry as over-capacity is eliminated".[42] And Northern Foods supposedly sources 80% of its food in the UK so it is ensuring that this model is entrenched in the UK[43].

Whilst most other sectors in the UK economy are sensibly concentrating on low volume, high value production, Haskins is urging UK farming to do the opposite, and compete head-on with the heavily subsidised million-acre grain farms in Canada and million-sow "hog cities" in North Carolina. He exudes that New Labour optimism that if he says ‘we can compete’ enough times, it will come true. At a recent conference, Haskins claimed that UK processed milk and yoghurt are highly competitive exports[44]. Why on earth we would want to export milk, a perishable product that can be easily produced on a more local scale, is beyond me. Besides, one of his key arguments, and one of the main reasons why he wants us to join the Euro, is that the value of the pound is too high to make our exports viable at the moment. So just when we will have this vibrant food export market is baffling.

Whilst Northern Foods and its supermarket friends will gain from turning Britain into a soulless industrial-agricultural prairie growing mass monocultures of unfamiliar commodity crops, its hard to see who else will gain. Certainly not the farmers, who he persists in stringing along. Besides, there is no consumer demand for the GM crops Lord Haskins champions, or the antibiotic residues found in most mass-produced meat.

From the announcement of his six week appointment as ‘Rural Recovery Co-ordinator’ in August 2001, Haskins began making pronouncements from his holiday in France as if he were running the show. He has suggested that half of the UK’s farms will disappear in the next 20 years, that small farmers should take second jobs on ‘BMW assembly lines’ to survive, and that ‘molly-coddled’ British farmers could learn a thing or two about entrepreneurism from the French. All helpful comments bound to reassure beleaguered British farmers, and sufficient for Downing Street to let it be known that the peer is ‘independent’.[45]

Hypocritical comments also from a man who receives £50,000 worth of subsidies on his Yorkshire wheat and barley farm and, like most farmers is hugely indebted to the bank[46].

Some other comments have sounded more sensible, such as overhauling subsidies to support environmental stewardship, promoting co-operatives to supply local markets and to further develop the organic market. But it’s hard to know which Haskins to trust. Earlier this year he famously said ‘Let the heir to the throne enjoy his excellent if somewhat risky organic food…Let my cattle enjoy their genetically modified soya’.[47]

Haskin’s report as rural recovery co-ordinator pulled no punches. In the short term, he called for £40 million of aid to be given to small businesses in hardest hit areas such as Cumbria. Margaret Beckett, Secretary of State for the Environment, Food and Rural Affairs responded with a mere £20 million. She and Haskins went on the blame farmers for being out of touch commercially and warned that the taxpayer should not support unsound businesses[48].

Beef and sheep farming have, until now, been heavily subsidised on the basis of headage payments i.e. a subsidy based on the number of animals. This has been blamed for the large sheep population that has increased by half to forty million over the last twenty years and been environmentally damaging to upland Britain. Through subsidies, the UK taxpayer currently pays around £5bn a year to farming - around a third of the industry's gross annual income - although the cost of foot and mouth will considerably inflate this sum[49].

Lord Haskins's tough recommendations were balanced with a plea for extra help for thousands of farmers whose animals are trapped in fields. Farmers whose stock has been slaughtered have received more than £1bn in compensation[50], others are effectively forgotten victims, with animals running out of feed and severe welfare problems looming.

These measures will spell the end for many sheep farmers who have suffered terribly through the stress and utter cruelty of the Government’s mishandling of the FMD crisis[51], as well as a crisis of over-production which has put them at the mercy of the food processors and supermarkets. The Government may have got what they wanted, a massive reduction in livestock farming in the UK and thus a massive reduction in subsidies, but at what human and animal costs? At what environmental costs? And at what cost for rural communities dependent on farming and associated industries? Such policies are making the solution to the farming crisis, environmentally and economically sustainable communities sourcing their food as locally as possible, seem a distant vision[52].

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3) Selling unhealthy overpriced food.

As highlighted earlier, Northern Foods are second to none in their treatment of their staff, but where is their concern/ interest/excitement for the thing they produce: food? Scanning the Northern Foods mid-term report 2001, it is easy to see the secrets of its financial success - well positioned brands, excellent manufacturing facilities and a more efficient capital management structure based on a share buyback programme. ‘Our aim’ according to the 2000 annual report, ‘remains the creation of shareholder value by being the most effective added-value food manufacturer supplying the UK retail market.’

This is a world where ‘quality’ seems synonymous with convenience and innovation, and ‘consumer interest in health issues’ is interpreted as ‘low fat and calorie counted ranges’. Examples of efficiency abound. At Riverside, for example, £12m-worth of investment in a continuous quiche production facility, coupled with daily performance measures of efficiency and labour utilisation, has increased capacity to 5000 quiches per hour[53].

It makes me want to run away crying for my mother’s cooking, or at least for my veg box and my cook book.

…and another thing!

"The Ski "yoghurts" manufactured by Northern Foods contain modified starch, sodium citrate, unspecified flavourings, anthocyanin, aspartame and acesulfame K. His Dalepak "lamb grills" (reconstituted meat masquerading as a kind of lamb chop) are loaded with mutton, rusk, sugar, sodium diacetate, modified waxy maize starch, flavourings, wheat protein, sugar beet fibre, dextrose, malic acid and sodium acetate. Goodfella's pizzas, also manufactured by Northern Foods, contain modified maize starch, dextrose, whey powder, sugar, flour treatment agent, mono- and di-glycerides of fatty acids, sodium stearoyl lactylate, L-cysteine hydrochloride, ascorbic acid, sodium polyphosphates, sodium ascorbate, sodium nitrite, and "smoke flavour"."[54]

Most of these ingredients are indeed cheap, for example, maize starch, sugar beet fibre and whey powder, are waste products of the food-processing industry. The products, on the other hand, are undoubtedly not cheap. Dalepak’s "lamb grills" cost £8.45 a kilo; almost twice the price of genuine lamb is most independent butchers.

Northern Foods deny that they currently use Mechanically Recovered Meat (MRM), the cheap sludge hosed off beef carcasses in abattoirs widely linked with transmission of new variant CJD, the human form of BSE. However, when asked for evidence they stated that they had no written records because "the information on product recipes is commercially confidential and the property of our retail customers[55]." So the question is, if they have no records, how can they prove MRM was never used? Maybe they should also answer why they consider commercial confidentiality more important than our health.

They did however admit that Bowyers used bovine MRM in its economy sausages before it took the company over in 1984. Northern Foods also revealed that Dalepak had used bovine MRM. "It has always been our policy not to use mechanically recovered meat. When we acquired Bowyers and Dalepak, the company moved swiftly to remove MRM, but this would have taken a few months to complete,' said a spokesman[56].

Lord Haskins has claimed that the poor need cheap food[57]. If his offerings are anything to go by, people will pay with their health, the degradation of the countryside and the exploitation of farmers. The poor need affordable food, but also deserve healthy food and a healthy environment.

But modern corporate farming gets worse the further up you look in the food industry chain. In the House of Lords register of interests, Haskins is also named as a director of JSR Farms and chair of Express Dairies.

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4) Exploiting small farmers – the case of Express Dairies

Express House

Meridian East

Meridian Business Park

Leicester, England

LE3 2TP

CEO – Neil Davison

Express Dairies is the UK's largest supplier of milk to supermarkets and the largest supplier of UHT milk and cream. In January 2000, after taking over Glanbia UK, they cut 460 jobs, closing dairies and distribution centres[58].

Haskins became Non-Executive Chairman of the Leicester-based Express Diaries at the end of March 1998. Express Dairies was de-merged from Northern Foods in 1998. His successor at Express Dairies will be Sir David Naish, a non-executive director of the company since 1998 and a former president of the National Farmers' Union[59].

If anything reveals the inequities within the food chain to Lord Haskins, it should be his own experience with Express Dairies. Despite being the market leader in liquid and UHT milk in the UK, they are in desperate financial trouble- their profits have fallen 18% this year[60]. This is not just as a result of foot and mouth nor an overly competitive market. Insiders claim that there is not even room for the three massive dairy companies that control the industry[61]. The real reason is the stranglehold that the supermarkets have over the industry.

Knowing that there is an oversupply of milk within the industry, the supermarkets have mercilessly squeezed the processors, and hence the small dairy farmers who supply them. During the height of the milk crisis last year, farmers were regularly being paid 5-6p/litre below the cost of production by Express and the others[62]. Even when some of the supermarkets passed on an extra 2p/litre on the price of milk to processors on the condition it was passed back to the farmer, Express Dairies failed to do so, rightly predicting that the supermarkets would again drop the price thus hammering their profits further[63].

Diversification into delivery services with Parcel Force, dry cleaning services, merging with Golden Vale and closing plants has not saved Express Dairies, and rumours of takeovers abound[64].

To add to the misery, Express Dairies has also been affected by FMD, axing its final dividend in 2001[65].

Before his retirement was announced, Haskins came under fire from shareholders for not focusing on the plight of Express Dairies. New management is expected to accelerate Express’ role in the industry’s move towards consolidation, by pursuing merger talks with companies such as Robert Wiseman Dairies, or the Swedish and Danish farmers’ cooperative Arla[66].

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5) Supporting the intensive factory farming of animals

JSR Farms is based down the road from Northern Foods in Driffield, East Yorkshire. Lord Haskins holds a non-executive directorship. It is one of the largest private, family-owned farming companies in Britain. Owning 6,400 acres, over 120,000 breeding and slaughter pigs and with an annual turnover of £20 million, this is scarcely a family farm of yore.

One look at the links page, with its catalogue of agrochemicals companies, shows where JSR’s sympathies lie. In 1998, they hosted an Aventis GM sugar beet trial. The biotech links are reinforced through a joint venture in pig genetics with US-based DeKalb genetics, owned by Monsanto. JSR Healthbred is one of the leading suppliers of high quality pig semen all around the world, including to US grain giant, Cargill’s 150,000 breeding sows.

The language used to describe pigs on their website reveals all. Currently they are using high-tech laboratory-based selective breeding to produce their genetically improved 'genepacker 105', 'genepacker 120' and 'meatpacker plus' models. Considering their links with Monsanto, however, one could imagine them jumping at the idea of genetically modified or cloned pigs in the future.

In Pig Farming, April 1999, John Webb, geneticist at the Cotswold’s Pig Development Company is sure that genetic engineering will shape the future of the pig industry. He states that the ‘genetic revolution’ has brought frozen embryos, allowing scientists to move genes around without risk, cloning, sex determination, in-vitro meiosis, selecting and cloning embryos.

He says: "Technology also provides the key to insert genes that would help improve pig meat quality, cause faster growth and ensure healthier pigs". He states that using a Meishan sow, scientists could add a growth development factor to increase litter size, a gene to provide a better carcase, a gene to determine sex to ‘ensure more efficient males and eliminate boar taint by removing genes responsible for skatole and andriosterone", so producing "36 top quality piglets per sow per year".

"That modern pig could then be cloned to provide producers with a regular income".[67]

When animals become mere commodities, it is no wonder that across Britain's highly industrialised pig sector, the level of animal welfare abuse is shocking, as Viva’s recent report Pig in Hell (2001) reveals. It is also not surprising that earlier this year, JSR farms were prosecuted for falsifying information claiming that live export pigs were properly rested on an overland journey from Wiltshire to Hamburg, when in fact they were denied the mandatory 24 hour resting period.

As with Northern Foods, JSR’s employment policies are exemplary. It was the first farming company to be recognised as an Investor in People and won National Training Awards in 1992 and 1994. As with Northern Foods it has close self-interested links with government. Its chairman, Tim Rymer, is a member of the Meat Industry Red Tape Working Group, part of the Food Standards Agency.

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6) Supporting Genetically Engineered Foods

Haskins is an outspoken advocate for GM foods, speaking at the US sponsored "Seeds of Opportunity: The Role of Biotechnology in Agriculture" Conference in May 2001.

Lord Haskins, reluctantly had his company remove GM ingredients in response to customer preference. He has also been an outspoken critic of organic foods. Ssee section 1 in Corporate Crimes.

According to the ‘Greenpeace Shopper’s Guide to GM’,[68] Northern Foods confirm that they do not GM material in their foods, although they cannot give assurances that the dairy, meat or eggs used in Dalepak products are derived from animals fed on non-GM crops. Likewise, they cannot confirm that the cheese and meat used on Goodfella’s pizzas comes from animals fed on non-GM crops.

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Conclusion

Haskins experience with Express Dairies and his own farm mean that he must know the real reasons for the global crisis in agriculture. He must know that farmers would much rather be paid a fair price than receive large subsidies. He must know that he peddles cheap unhealthy, synthetic convenience junk food, and that agricultural liberalisation will only increase its availability. He must see that we will become reliant on exploiting Southern producers whilst rural communities in Britain are decimated. He must know that the faster the automated quiche machine goes, the faster the chink of the cash register, the faster the pace of modern life will go. But somehow he can't see it.

Blinded by high-tech agriculture, economies of scale and free-trade theories he can only prescribe more of the same. Or perhaps he is right after all, and the English farmers will soon be borrowing the spirit of their French counterparts and taking on Northern Foods as the Confederation Paysanne is taking on McDonalds.

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References
[41] Richard Adams, City diary, Guardian, August 7, 2001

[42] www.guardian.co.uk/Archive/Article/0,4273,4234737,00.html
[42] Pestons People Business Section of the Sunday Times 26/8/01

[43] Lord Haskins speech at Agrivision Conference, Stoneleigh, Warwickshire 6/12/01.

[44] Interview with Adrian Arbib at Agrivision Conference, Stoneleigh, Warwickshire 6/12/01

[45] "No. 10 distances itself from claim that farmers are too reliant on aid." The Independent 14/9/01

[46] See section on Farming interests.

[47] At the Provision Trade Federation annual dinner 2001

[48] ‘Stick and £20m carrot for rural economy’ in The Guardian 19/10/01

[49] ibid.

[50] ibid

[51] See for example ‘Not the Foot and Mouth Crisis’ published by Private Eye 26/10/01

[52] See for example, ‘Bringing the Food Economy Back Home’, Norberg-Hodge,Gorelick and See for example, ‘Bringing the Food Economy Back Home’, Norberg-Hodge,Gorelick and Merrifield. ISEC report 2000. Call 01803 868650. Or ‘The Case Against the Global Economy’ Goldsmith and Mander (1996) Sierra Book Clubs. ‘Localisation - A Global Manifesto’. Hines (2000) Earthscan.

[53] Northern Foods Annual Report 2000.

[54] ‘That’s the Horror of Haskins’ by George Monbiot. The Spectator 1/9/01

[55] ibid.

[56] ‘Top Companies In Slaughterhouse Slurry Claim’ The Sunday Times 29/10/01 see also www.readymealsinfo.com/categories/results-manufacturers.asp?txtContent=3313
[57] ‘Poor need cheap food’ The Guardian 13/9/01

[58] www.red-star-research.org.uk
[59] ‘Chairman of Two British food companies to retire’ November 14th 2001. Evening Standard.

[60] The Guardian, October 5, 2001: www.guardian.co.uk/business/story/0,3604,563675,00.html
[61] Pers. comm. with former employee of Express Dairies.

[62] Farmers For Action: www.farmersforaction.org
[63] Pers. comm. with former employee of Express Dairies.

[64] Business a.m., 29th May 2001, www.businessam.co.uk/TodaysPaper/TodaysArticles/0,2910,32417,00.html
[65] 'City Alarm Over Foot and Mouth', Evening Standard, 20th March 2001, www.thisismoney.com/20010320/nm29689.html
[66] UK: Royden attacks Haskins' role at Express Dairies 5/10/01. just-food.com editorial team.

[67] Scientist Warn About GM Timebomb for Pigs. Pig Farming. April 1999

[68] www.greenpeace.org.uk/Products/GM/index2.cfm

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