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New Zealand Pushes Technology to Head Off Mislabeling of Meat; Producers Work to ‘Fingerprint’ Products as Mislabeled and Tainted Food Eat Into Customer Confidence

July 31, 2013, 11:01 p.m. ET

New Zealand Pushes Technology to Head Off Mislabeling of Meat

Producers Work to ‘Fingerprint’ Products as Mislabeled and Tainted Food Eat Into Customer Confidence

LUCY CRAYMER

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WELLINGTON, New Zealand—Beef and lamb producers are at the forefront of a global push to try to verify scientifically the provenance of the meat that people buy, as a series of scandals over mislabeled and tainted food eat into consumer confidence. Farm groups from the highlands of Scotland to the pastures of New Zealand are investing in technology that tries to “fingerprint” meat by looking for chemical traces of the soil, grass, water and air where the animals once roamed. The move shows how economies dependent on farm income are battling to retain their reputation for high quality—and their premium prices—in an increasingly complex and opaque global food chain.“If companies can find a way to pounce on any rogue importers that are trying to pass off something that isn’t from New Zealand as from New Zealand, then it needs to be done,” said Nigel Stirling, who raises sheep and deer on a 1,000-acre farm in Otago on New Zealand’s South Island. The ability to tell if other products are being sold as New Zealand meat could protect future profit, he says.

Scandals such as horse meat being marketed as beef in ready-made meals in Europe, melamine in baby formula and an unidentified meat sold as New Zealand lamb in China have tarnished the food industry’s reputation.

In New Zealand, where the food and forestry sectors contribute 70% of export earnings, scientists say it is now possible to trace the origin of meat to specific farms. They say a cow reared on pasture will have levels of nitrogen, carbon and other elements that match the local soil.

 

Mr. Stirling sells much of his livestock to Alliance Group Ltd., which produces around 30% of the country’s meat exports and posts 1.4 billion New Zealand dollars (US$1.1 billion) in annual revenue. Alliance is set to test technology to identify the origins of meat being sold in China—where a growing middle class is eating more protein—that is labeled as coming from New Zealand.

The company plans to buy and slaughter sheep from countries in Asia and the Middle East and ship the meat to laboratories in New Zealand for testing to begin building a “registry” of fingerprints.

The long-term goal is to have roving teams of investigators swooping in unannounced on wholesalers and restaurants anywhere Alliance-branded meat is sold to conduct random testing.

Rebecca McLeod, lead scientist at Oritain, a New Zealand-based company that developed the technology, expects to find big differences in the natural chemical makeup of the meat.

For instance, a cow reared close to the sea or chewing grass on a farm with volcanic soils in New Zealand will likely have a higher number of sulfates than cattle in China, she says.

Food producers have good reason to protect their brands. New Zealand lamb is 27% more expensive than local lamb at Little Sheep Mongolian Hot Pot, a popular restaurant chain in Chinese cities, for example.

In May, Shanghai authorities raided a wholesale meat market and seized meat branded as “New Zealand Sliced Lamb” amid doubt over its true origin. China’s state media has reported the discovery of rat, mink and fox meat being passed off as beef and mutton.

Technology to track the provenance of food is in its infancy, and scientists say it will be years before it can be rolled out widely.

“We are at a bit of a juncture between the research stage and starting to use it in earnest,” said Andy McGowan, head of Industry Development at Quality Meat Scotland, which represents livestock farmers contributing more than £1.5 billion ($2.3 billion) to the U.K. economy.

Quality Meat Scotland has developed a technology similar to Oritain’s that it is using in the U.K. to prevent restaurateurs from passing off Irish or Brazilian beef as more expensive Scottish beef.

It tests levels of elements such as hydrogen and sulfur in a meat sample, then compares the results with data showing the chemical makeup of meat in Scotland. The technology isn’t foolproof, Mr. McGowan said. But if the meat doesn’t match, then that is a red flag for further investigation.

Other companies are trying sophisticated tracking systems. New Zealand’s Silver Fern Farms is using electronic tags on cattle and deer to track their progression from birth to the plate.

A similar plan was introduced in the U.S., but federal funding was pulled in 2010. Now, only cows in Michigan have their ears tagged with bar codes.

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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