Recall costs recorded by Ter Beke relating to a subsidiary in the Netherlands involved in a Listeria outbreak were almost €8 million ($8.9 million), according to the firm’s annual report.
In the second half of 2019, Ter Beke was faced with temporary closure of the production site belonging to Offerman in Aalsmeer while Dutch authorities investigated the Listeria outbreak.
The recall involved 400 different types of sliced ready-to-eat (RTE) meat based products corresponding to around 300 tons, and included 10,000 businesses mainly in the Netherlands and Belgium. Offerman produced 650 different types of sliced RTE meat products for the retail market and catering industry and received about 200 different meat products from 60 suppliers.
Sliced RTE meat products from different suppliers, produced between 2017 and 2019 by the Dutch company, were contaminated with a type of Listeria monocytogenes matching the outbreak strain.
Twenty-one people were infected with Listeria monocytogenes in the Netherlands and Belgium. One person fell sick in October 2017, eight in 2018 and 12 in 2019. Three people died. All patients were hospitalized and one woman had a miscarriage. Two Dutch patients were pregnant women in their 30s. The others were from 64 to 94 years old and 10 were men.
The European Food Safety Authority (EFSA) and European Centre for Disease Prevention and Control (ECDC) could not identify the exact point of contamination but found it likely happened at Offerman, which was the only common manufacturing point of contaminated products.
Most customers retained
Ter Beke reported non-underlying costs of €11.2 million ($12.5 million) mainly including the one-off product recall expenses of €7.914 million ($8.8 million) and a provision for the social plan negotiated following partial closure of the site in Aalsmeer.
Following the product recall, a significant part of the volume was transferred to the group’s other production sites. Because of this response and collaboration, Ter Beke said a “considerable portion” of the Offerman customer portfolio was safeguarded for the future.
CNV, the second largest union in the Netherlands, represents some workers at the Offerman Aalsmeer plant and previously revealed part of the plant would not reopen. A large hall was closed while a smaller one which employs around 40 people will remain open.
Despite the effect of the product recall in the Netherlands, turnover in the processed meats division of Ter Beke increased from €420.1 million ($467 million) to €437.6 million ($486 million).
The company was also impacted by an outbreak of African swine fever in China in April that led to an estimated 30 percent reduction in the pig population. As a result, import, primarily from Europe, increased massively. This had an inflationary effect throughout the chain, as a result of which some meat cuts experienced price increases of up to 80 percent.
Finally, on March 15 René Stevens, chief financial officer, will leave Ter Beke and be succeeded by Yves Regniers of Esroh BV, who is currently group controller.
Stevens, who spent the past 15 years in this role, guided the company financially through several difficult times including the horsemeat scandal in 2012 and recent product recall in the Netherlands.
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