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Horsegate caused by ‘more for less’ culture: Warburtons

By Mike Stones+

07-Apr-2014
Last updated on 09-Apr-2014 at 14:28 GMT

The horsemeat scandal was caused by “a more for less” culture in the food supply chain, which highlights the benefits of manufacturing branded products compared with own-label, said Warburton’s boss Jonathan Warburton.

Speaking at a farmer conference organised by the grain marketing organisation Openfield, the Warburtons chairman said the scandal revealed important lessons about supply chain pressures. “Even though nobody will admit it, that [the horsemeat crisis] was caused by undue pressure on the supply chain to deliver more value for less money,” he said.

“That’s part of the deep-seated reason that everything we make goes out with our name on it,” Warburton added. “We want to know where it’s come from and I don’t want to be running a business where I am under so much pressure to meet a price that I can’t add that extra bit of alchemy that makes the difference between great quality and average quality.”

Branded food manufacturers

Warburton went on to underline the strength branded food manufacturers enjoyed compared with own-label producers in negotiations with retailers. “I have spent my career dealing with the retailers,” said Warburton.

“They can be a challenging bunch at times. We don’t make any private label products. We are a 100% branded business. One of the reasons we went down that route was realising, very early on, that the balance of power disappears if you’ve not got a brand.”

Warburton said he wanted to believe that when he walked into Tesco boss Phil Clarke’s office, he had some “influence and power” in the neogotiations. “The balance it gives us, being able to talk about a quality product, is hugely important.”

But as a non executive director for the privately-owned own-label manufacturer Samworth Brothers for 17 years, Warburton said he understood that business model very well. “It’s just not what we want to do.”

Retail bosses were tough but fair, he added. “I’ve known most of the major retailers. I know Phil Clarke very well and I knew the previous board of Tesco very well. If you have a quality product and are well invested they are very fair to do business with in my experience – but they are as tough as nails.”

‘They are tough as nails’

Turning to wheat purchases, Warburton said he would prefer to produce bread from exclusively British wheat but had been frustrated by technical difficulties. “We don’t believe that we can make the best plant bread in the world by using just 100% British wheat,” he said.

We would dearly love to but the growing conditions across on the content and in north America are completely different from ours. They can grow a variety that we struggled and tried many times to get here.”

The bread manufacturer was proud of buying the best of British and Candian wheat, he added. But the firm had no plans to put a British flag on its packaging because it “would have to take the blue out” in September, if Scotland voted for independence , Warburton quipped.

Openfield’s Farmer Conference took place at Towcester Racecourse on Wednesday April 2.

Watch out for our exclusive interview with Warburton in the May edition of FoodManufacture.co.uk’s sister publication Food Manufacture .

Meanwhile, Weetabix confirmed today (April 7) it had started a consultation with its UK staff to cut pay and working hours in response to pressure from supermarket own-label products and the discounters. 

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