The horsemeat scandal hit the headlines recently with a number of the largest European supermarkets and major food manufacturers embroiled in the controversy. The scandal has led to millions of products being withdrawn from sale and recent arrests in the UK for suspected fraud offences.

It would appear that a number of food products which were labelled as containing beef, actually contained horsemeat, in varying quantities. In addition, the sampling undertaken uncovered instances of beef products containing traces of pork, including in some food products certified as Halal.

Horsemeat is reportedly safe for us to eat but concerns have been raised about the possibility that the drug, phenylbutazone, may be present in the horsemeat. A statement released by the Department of Health suggests that horsemeat containing phenylbutazone presents a very low risk to human health. The issue is therefore being treated by the regulators as a mislabelling matter rather than a food safety one.

The scale of the mislabelling has led to criticisms of the current European controls which are in place to try to safeguard against deliberate attempts to profit from the mislabelling of food.

In particular, anger has been expressed at the horse passport system which keeps track of horses moving across Europe. Some commentators have argued that the horse passports, which show whether the animal has a clean record, can be duplicated quite easily.

Also, the scandal has prompted calls for a shake-up of European food labelling rules. This is because there is currently no universal requirement for country of origin labelling for processed meat. Many feel that if companies were forced to specify which country the meat in their products comes from, they would have to keep a much tighter grip on the supply chain and it would be less likely that illegal meat of unknown origin would make its way into dishes. It has been reported that the European Commission is currently considering extending country of origin labelling rules to processed meats through an impact assessment report.

There are also calls for more testing of products, with one cause of the scandal being attributed to an overreliance and trust in paperwork. The problem emerged when Ireland’s Food Safety Authority, announced that it had found traces of horsemeat in beef burgers sold in Ireland and the UK. Until this point it would seem that the sampling undertaken in the UK largely focussed on detecting potential "food safety" issues as opposed to mislabelling matters. However, it is inevitable that increased targeted and random sampling in the food industry will ultimately lead to greater costs.

In terms of enforcement of the existing food labelling rules, there has again been criticism that the system is weak and is dependent upon the strength of the enforcement regimes existing within each Member State. We anticipate that in the UK, the regulators are likely to take a more pro-active stance going forward in relation to taking enforcement action where they perceive that mislabelling offences have been committed.

However, given that the maximum penalties which can be imposed for breaches of food labelling rules are broadly limited to £5,000, it seems likely that the Police will try to step in to deal with higher profile cases, relying on the law of fraud. Under fraud legislation in the UK, much greater financial penalties can be imposed on businesses and indeed directors and senior managers involved in such offences can be sent to prison for up to 10 years.

It is too early to speculate as to whether any individuals will be prosecuted in the UK as a result of the recent arrests made by the Police. However, recent cases indicate that there is a desire to hand down hefty penalties for those found guilty of food fraud. For example, three Directors of a company falsely marketing its products as "organic" were recently given custodial sentences, community work and directorship bans, and were also ordered to pay large sums pursuant to confiscation orders.

It is important that businesses are prepared for increased regulatory scrutiny in the wake of the horsemeat scandal. Food businesses should have a robust crisis management plan in place to deal with the issues arising from the scandal, including a robust media strategy.

In the event that a food business is faced with a visit from the Food Standards Agency, local Trading Standards or even the Police, legal advice should be sought immediately. The regulators have wide ranging powers in the UK to take samples, seize documents, interview employees and even, in some cases, make arrests. It is therefore critical that companies have access to early and specialist advice.