When chains break: the UK fuel crisis and the horsemeat scandal

In June 2013 two Secretaries of State asked Professor Chris Elliott to review how Britain's food supply networks are policed, after food products turned out to have been adulterated with horse meat (Elliott, 2014, pp. 6, 11, 58). Eight years later, in late September 2021, 15% of UK adults told the Office for National Statistics (ONS) that they had been unable to buy fuel, as a House of Commons Library briefing reports (House of Commons Library, 2021, p. 5). If you buy inputs through several tiers, or sell through distributors, the two episodes show two different ways a chain can fail. I read the 2013 horsemeat scandal through Elliott's final report, and the 2021 fuel disruption through the Library briefing, CBP-9350.

How do the two failures differ?

One was a real shortage of capacity, visible at the pumps. The other was concealed fraud, which surfaced after the goods had been sold. The table sets them side by side; the choice of rows is mine.

Why did petrol run short in September 2021?

According to the briefing, there were too few tanker drivers to deliver fuel to petrol stations, and panic buying made it worse, which led to long queues and fuel shortages at some stations in late September (House of Commons Library, 2021, p. 3). In the South and East of England, 19-23% of adults said they could not buy fuel (House of Commons Library, 2021, p. 5).

Behind that sits the wider HGV driver shortage, which the briefing reports as a "perfect storm". Driving tests cancelled during the pandemic left too few new drivers; trained drivers who had left the UK might not return because of pandemic restrictions or new post-Brexit immigration rules; and commentators add long-standing structural issues such as an ageing workforce, low pay and poor working conditions (House of Commons Library, 2021, p. 6). On Brexit the briefing records a range of views on how far it contributed (House of Commons Library, 2021, p. 2). Some industry bodies partly blamed it for labour shortages in some sectors (House of Commons Library, 2021, p. 9), while Brexit Minister David Frost said the supply chain problems were due to the pandemic (House of Commons Library, 2021, pp. 10-11). The briefing does not adjudicate, and neither do I.

What did the government do, and did industry agree?

The government offered more training, faster testing capacity, a simpler licence regime and a proposal to relax cabotage rules for foreign drivers; the UK haulage industry strongly opposed the last of these (House of Commons Library, 2021, p. 10). Temporary visas for fuel drivers opened on 2 October and expire at the end of March 2022 (House of Commons Library, 2021, p. 11). The government said temporary visas are not a long-term solution. Industry leaders told the Business, Energy and Industrial Strategy Committee that visas lasting a few months would not fix structural shortages, and asked for more training, better coordination and strategic planning (House of Commons Library, 2021, p. 11). The briefing is dated 22 October 2021, with events still moving, so it cannot say which measures worked (House of Commons Library, 2021, p. 1).

What does the Elliott review say caused the horsemeat scandal?

It names no single cause. The report is a review of the system rather than an account of the incident; the horsemeat crisis was a trigger, alongside concern about the growing potential for food fraud and food crime (Elliott, 2014, p. 6).

On price, Elliott writes that consumers have grown used to variety and access at low cost, at marginal profit to suppliers, and that this has increased the opportunities for food crime (Elliott, 2014, p. 13). He found that adversarial procurement in some businesses, particularly some larger retailers, had not changed and in places had got worse, and he cautioned against buying below the recognised reasonable price (Elliott, 2014, p. 21).

On oversight, the report notes there was no national food authenticity survey between 2008 and after the horsemeat incident (Elliott, 2014, p. 35). Many stakeholders outside government believed the 2010 machinery-of-government change had confused responsibilities and played a part. The review found that the winding down of the FSA's authenticity programme began before that change; attributing no blame, it said the decision was certainly not helpful in spotting major food fraud issues (Elliott, 2014, p. 51).

Who was harmed? The industry had claimed to be the victim because of recall costs and brand damage, but Elliott writes that consumers were the real victims (Elliott, 2014, pp. 13-14). Food crime tends to be identified, if discovered at all, after much of the food has been distributed and eaten (Elliott, 2014, p. 16).

Where do long chains leak?

In four places in Elliott's table: storage, traders and brokers, transport, and frozen blocks of meat trim. A trader may never take physical possession or ownership of the meat, so may escape registration and monitoring, and is driven mostly by price rather than provenance (Elliott, 2014, p. 44). Vehicles are not generally sealed, and the international consignment note (CMR) carries scant information (Elliott, 2014, p. 45). The report says similar trading channels were likely used to bring horse meat into the beef chain; that is a judgement about likelihood, not a proven finding (Elliott, 2014, p. 123). Among Elliott's mitigating measures for traders and brokers is to avoid products with long or complex chains or, at the very least, scrutinise them closely (Elliott, 2014, p. 123).

One example of a good chain in the report is McDonald's UK beef patties: three steps, with an electronic label tracing each batch to its farm (Elliott, 2014, p. 110). I have not verified that description independently.

What does the review ask of companies?

Two pillars matter most to a business. "Zero tolerance" encourages industry to ask whether a deal is too good to be true, to put food fraud in company risk registers, to support whistleblowing and to reward responsible procurement (Elliott, 2014, p. 25). The audit pillar backs modular audits with forensic accountancy and mass balance checks, and a shift from announced to unannounced audits (Elliott, 2014, p. 48).

Two further ideas are aimed at boards. Risk management starts with knowing who you do business with, and understanding a supply chain takes more than a paper trail, which alone will not defend a company against allegations of negligence or of handling counterfeit goods (Elliott, 2014, p. 20). And shareholders have a role in holding companies to account where management falls short (Elliott, 2014, p. 20).

What should an SME owner check before the next break?

Six questions follow, each drawn from a signal in the documents. The example is wholly invented: "Hẻm Bảy Workshop" and every number are mine. The workshop makes Vietnamese pork roll (chả lụa), buys lean pork through one trader and delivers to a few dozen outlets with a single haulier.

This suits you if you buy directly from few suppliers and can demand paperwork. It does not suit you if you are a small link at the end of the chain: SALSA, the certification scheme for small food businesses described in Elliott's annex J, says extending traceability beyond one step up and one step down is difficult, and that some producers buy materials through wholesalers, where tracing further is impossible (Elliott, 2014, p. 117). In that case, choose suppliers you can check. The red-flag outline in annex J, by Professor Lisa Jack of the University of Portsmouth, says no red flag is proof of fraud, only a question to investigate (Elliott, 2014, p. 114). The six questions are my own inference, not tested on Vietnamese firms. For how one apparel group says it keeps control without owning factories, see the Uniqlo post.

Going deeper: what did I read, and what did I not?

I read the whole CBP-9350 briefing (16 PDF pages; page numbers in this post are PDF pages, with the cover as page 1). The armed forces appear only in the title of a press release in a footnote, which I did not read, so this post says nothing about military drivers. I also did not read the Institute for Government piece on the government's communications that the briefing lists under further reading.

For Elliott (2014), page numbers are the printed "Page | N" numbers. I read the executive summary, chapters 1-10, the opening of annex A, annexes G and H, and most of annex J (pages 110-124); I did not read annexes B-F, I or K-N. The report does not narrate the horsemeat incident, so what it says about leaky chains is Elliott's view of the system, not an investigative finding about any one company. This post does not show that one kind of chain breaks more easily than the other; it sets two public descriptions side by side.