business news in context, analysis with attitude

Reuters reports that the Canadian Beef Export Federation has revealed that a single case of mad cow disease has been detected in the province of Alberta, based on a test given to an eight-year-old cow last January.

The entire herd has now been impounded, according to the report, because of concerns that more could have bovine spongiform encephalopathy (BSE), or mad cow disease. The government says that the infected animal was not processed and the herd to which it belonged will be immediately slaughtered.

Other herds, however, have not been quarantined as of this writing.

The discovery was perceived as a blow to the Canadian economy, coming as it does just weeks after the severe acute respiratory syndrome (SARS) threat virtually shut down Toronto to tourists, and to the province of Alberta, which is described as being Texas-like in its cultural devotion to and reliance on cattle ranching. About 5.5 million cattle can be found in Alberta, outnumbering people by almost 2-1.

Canada is the world's third largest beef exporter, and more than a half-million head of cattle were shipped from Alberta to the United States last year, raising the possibility, at least, that a mad cow-infected animal may currently be in the US. The Canadian discovery triggered an immediate ban in the US on Canadian beef imports, including Canadian cattle, sheep, goats and processed meats. There also was a sell-off of cattle futures, and the share price of stocks such as McDonald's and Tyson dropped several percentage points.

More than 80 people in Britain and Europe have died from the human variation of mad cow disease, which is contracted by eating an infected animal.

The US Department of Agriculture (USDA) described the threat of transmitting the disease to animals in the United States as very low, and USDA Secretary Ann Veneman told CNN, "I intend to eat a steak tonight."

Japan and South Korea, the third and fourth largest markets for Canada's beef exports, immediately banned beef imports from Canada, and South Korea went a step farther by banning Canadian dairy imports.

Canada's only other case of mad cow disease was in 1993, a case in which the cow was imported from Britain. Canadian officials have not said if they know where this new infected cow came from.

The Boston Globe reported this morning that Terry Donilon, a spokesman for Shaw's Supermarkets Inc., said, ''We've undertaken a review of all our beef products and had extensive checks with our major suppliers. All our beef comes from the United States, but we're going to dot all our i's and cross all our t's and check our secondary meat sources as well,'' such as soups and spaghetti sauces containing beef. Shaw's set up a toll-free hot line for shoppers, 1-888-431-7429.

Faith Weiner, a spokeswoman for Stop & Shop Supermarket Co., told the Boston Globe that ''we are doing our due diligence and investigating this issue just like everyone else. We would never do anything that would put our customers in harm's way.''

Both Shaw's and Stop & Shop said they had no sense of the consumer reaction to this point, and had not evidence of any tainted beef being sold in their stores.

The occurrence of the scourge in North America is potentially "devastating," John Lockie, executive director of R-CALF USA, a national advocacy group for cattle ranchers, told USA Today. "There's going to be a tsunami tomorrow."
KC's View:
There must be a sense of déjà vu over at McDonald's headquarters; in Japan, after all, sales plummeted when a mad cow scare hit the country.

US and Canadian food retailers and processors are going to have to step up to the plate and deal with the inevitable questions about the meat supply in a direct, candid way. There is no room here for obfuscation, which will only serve to disenfranchise the consumer.

We've been concerned about this for a long time, and have argued consistently that retailers should have been preparing for this kind of event years ago. After all, it was Superquinn in Ireland that was providing information to consumers about the origins of the meat it sold long before there was a mad cow scare in Europe; when one hit, consumers had such faith in Superquinn that it was the only chain around that saw its meat sales actually go up.

But faith is not something instilled on the spot and at the retailer's convenience. It is earned slowly and with great care.

We worry that perhaps too many meat retailers have done too little to prepare for the situation they may now face.

By the way, this may just be a coincidence, but we received a press release yesterday from Whole Foods that began as follows:

    As eager Americans begin firing up their grills this season, Whole Foods Market is kicking off a national celebration today showcasing the beauty and remarkable flavor of natural meat. The world's largest natural and organic supermarket's 140-plus stores nationwide will offer samples, colorful grilling guides and in-store activities featuring the company's extensive selection of natural beef and poultry, which has been raised to taste better.

Get the picture?