Beef over BSE
Two weeks ago, while farmers were digesting the Government's £1b aid package over beef, restaurateurs Kathy and Mark White were trying to swallow another huge downturn in sales.
Turnover at their London steak restaurant, Alistair Greig's Grill, was down 66% on normal takings and the week before it had slumped by 75%. The couple have had regular meetings with Lloyds Bank - "They've been very supportive" - and are frantically trying to do deals with their creditors. Unlike the farmers they get their beef from, there will be no compensation for caterers like the Whites. But, like many in the industry, the beef crisis will stay with them for a long time.
The Whites can still see the funny side - but only just. They have displayed their own "BSE" notice beside their menu declaring: "Best Steaks in Europe… Succulent Scotch Sirloin, Grass-Fed". Says Kathy White: "We're a steak restaurant, we're famous for our steaks and I was adamant that we would not stop taking the wonderful Scottish meat that I believe to be perfectly safe."
When the Government made its fateful announcement on 20 March that BSE in beef was the "most likely" cause of several new cases of Creutzfeldt-Jakob disease in humans, the effect on the catering trade was immediate. From burger chains and restaurants to airlines and schools, British beef was taken off the menu and caterers switched to supplies from Australia, Argentina and the rest of Europe. More chicken and pasta meals were loaded on to British Airways flights and in Burger King sales of chicken doubled almost overnight. Restaurants issued notices to diners in attempts to reassure them that the beef they were eating was safe, and nearly every caterer in the country was on the phone to suppliers seeking their own reassurances.
Some staunch supporters emerged throughout the industry, many of them independents who, like the Whites, were determined to keep British beef on their menus. But because of the sheer scale of the media coverage and the massive consumer boycott that ensued, the larger chains have found it difficult to remain so loyal.
"We now use only imported beef and I feel very sad about that because I eat English beef at home," says James Naylor, chief executive of City Centre Restaurants. Christopher Allen, operations director of Premier House, the pub restaurant arm of the Greenalls Group, says he thinks British beef is perfectly safe - but his customers believe otherwise. Beef consumption is still down by 20% throughout his chains, and at its lowest it was 70% down.
Ghost town
It is restaurants that have made beef their mainstay, like Alistair Greig's Grill, which have undoubtedly suffered the most. At the Carrington Arms in Moulsoe, Buckinghamshire, where beef makes up 50% of sales, turnover dropped by 80% after the Government's announcement. Proprietor Edwin Cheeseman says: "It wasn't the fact that people were changing from beef to anything else; people just stopped coming out to eat. We had four days of thinking the end of the world was coming. It was like a ghost town." The regulars soon began drifting back but sales are still 10-15% down.
At Simpson's-in-the-Strand in London, famed for its traditional English dishes, sales of beef from the dinner menu fell by 15% and are only just beginning to pick up again. Managing director Brian Clivaz says British customers are continuing to eat beef but overseas visitors, worried by the worldwide ban on British beef products, are looking for alternatives.
"The Europeans, particularly the French and Germans, have now switched to lamb and the Japanese have moved away from beef altogether," says Clivaz, who sources his beef mainly from Scotland.
The Whites, too, are less concerned about the effects on the home market than about how it has hit tourists, who make up 50% of their business. Says Kathy White: "That's just died a death because of the ban on beef in Europe. It's had a catastrophic effect on our restaurant."
Downside
Thankfully for the industry, the catastrophes have been few and far between as in most cases customers have simply switched to other dishes such as lamb, pork and chicken. Says a source at Whitbread: "The knock-on effect on business has been minuscule, turnover has remained the same or in some cases higher." The downside is that prices on other meats have rocketed by as much as 30%, so caterers everywhere are now facing higher food bills.
The Meat and Livestock Commission (MLC) has set aside £5m to help boost the British beef market again, and last week it announced some specific promotions for the catering industry. But opinions are mixed over whether the industry can recover. Most caterers say that sales are back to 80% of what they were before the crisis, and there is a definite consumer swing back to beef. "Over the last week or two sentiment has been changing and people are far more comfortable with beef," says Bob Cartwright, director of communications at Bass Taverns, which is now thinking of lifting its ban on British beef.
Those sourcing from outside the UK are confident that sales will bounce back. "They went down dramatically but now that we've got imported products, sales are almost back on par again. I think it will blow over," says Naylor.
Clivaz is not so sure. Although he is confident about his own restaurant, he believes the industry as a whole will feel the effects for some time. "I think this crisis will take us many years to recover from. It's devastating for the beef industry and it has definitely changed the way people eat. People don't buy mince, they're not eating lasagne, they're not eating burgers in restaurants."
But he does think the trade is able to adapt. As he points out, even the burger chains now offer lots of alternatives to beef. "The restaurant business reacts very rapidly to what the customer wants. If we sell it, we keep it on the menu. If we don't, we take it off."
Others in the trade have already resigned themselves to a more beef-free future, simply because the public's eating habits have been moving that way for a long time. Airline caterer Alpha Airports Group says that the demand for beef has dropped by 15% over the last year.
Edwin Cheeseman is optimistic; he even thinks his sort of business - selling prime cuts of steak - could benefit from the scare. "At the moment it's dropped down a gear but in the long term it's going to be very good."
However, like many, he is bracing himself for a rise in the price of British beef as the Government's slaughtering policy comes into force and supplies dwindle. "It's going to put tremendous pressure on price," says Brian Kilkenny, trade marketing manager at the MLC. He says that quality cuts of beef are rising in price, and he expects minced beef prices to go up by 10-20%.
Many of the larger chains are likely to continue sourcing from abroad for some time, especially as they are finding overseas beef cheaper.
In the meantime everyone is watching the Government's negotiations with Europe closely, and a lifting of the worldwide export ban is expected to be the first important step to restoring consumer confidence.
It's going to be a tough job. An estimated 60-70% of schools still have a ban on all beef and a spokesman for the Local Authority Caterers Association says: "I think it's staying off the menu for the time being." McDonald's, which now sources all its beef from Europe, is vowing to continue its ban on British beef until consumer confidence picks up.
Reassurance
But even the MLC admits that some good has come out of the beef crisis. Relationships between caterers and their suppliers are getting stronger and the focus now is much more on quality, with chefs and restaurant managers asking more questions about their beef. Says one supplier: "At the end of the day it's going to make us look at what we buy. Our customers need to be given the reassurance that what they're buying comes from a proper source."
As for the Whites, they had another meeting with their bank last week. One chef has gone on unpaid leave and they have had to let a kitchen porter go. Asked about her own future, Kathy White says: "I don't honestly know."
