Sunday Business

Northern Chief Backs GM Food

Northern Foods chairman Lord Haskins is reported as urging consumers and manufacturers to reconsider their opposition to genetically-modified food, even though his own company pledged to phase out GM ingredients 18 months ago.

Addressing an audience of several hundred farmers at a conference in Oxford last week, the Labour peer said that food producers, manufacturers and retailers must accept change if they are to prosper in a rapidly consolidating market.

Embracing genetically-modified food could deliver huge health benefits if crops and livestock were artificially altered to increase their vitamin content which, in turn, would generate overseas investments from pharmaceutical companies willing to explore the potential benefits, according to Haskins, whose views echo the prime minister's staunch defense of GM ingredients.

In July 1999, Northern KGoods - like many of its competitors - bowed to consumer pressure and agreed to remove engineered additives from products including Ski yogurts and Mark & Spencer ready-made meals, even though the company believes GM food is safe.

"Its development is going ahead at full pace everywhere in the world except Europe and India. The financial prize is enormous and for Europe to deny itself that opportunity does not make any sense, " Haskins says.

GM crops could also help solve potential food shortages, he argues, if the global population swells by the predicted 50% to 9bn by 2040. "Where are these people going to get their good from?" he asks. "The problem will not just be in poor countries - and meat eaters are expensive to supply."

The bigger health issue, highlighted by the Food Standards Agency's admission last week that unsafe meat is still being passed as fit to eat, is likely to be the continuing problem of BSE. The agency, launched last April to advise both consumers and ministers on food safety, has a difficult brief, given the ongoing problems the UK meat and livestock industry must tackle.

"Sometimes I'm amazed by how unfazed the British public are by safety," says Haskins, who is also chairman of the government's Better Regulation Task Force. "The agency has a horrendously difficult job and the test of its success will be the amount of confidence the public has in British food."

But structural changes including global competition and consolidation could have an even more profound impact on the industry. In the last year, United Biscuits has been broken up, Unilever has swallowed Bestfoods and, in the past two months alone, Perkins and Hazlewood have been returned to private ownership.

Social and demographic trends, such as the growing in the number of people living alone, together with what Haskins describes the relentless progress of globally -branded fast foods, will put pressure on the remaining players.

Express Dairies, for example, of which the Labour peer is also chairman, is thought to be particularly vulnerable.

"The need for further shake-up in the food manufacturing industry is stark and clear," Haskins warns, "There have to be losers: there is too much not-very-good supply hanging over the market."

However, with customers demanding a greater variety of better-quality food, there are also opportunities. The growth of London's restaurant scene and the consequent popularity of gourmet cooking as well as the increasing demand for low fat could also prove lucrative.

But organic produce is, according to Haskins, unlikely to be a dependable money-spinner in future years. "In the long term, how many people are prepared to pay more to pander to their short-term neuroses?" he questions