Warning about student ‘money mules’

25 February 2013 Last updated at 19:03 ET

By Simon Gompertz Personal finance correspondent, BBC News

Fraud experts are warning that hundreds of thousands of people are in danger of being duped into laundering money for fraudsters.

They are being recruited as unwitting “money mules” who allow their own bank accounts to be used to disguise the proceeds of crime.

The study was carried out by Financial Fraud Action, which tackles fraud on behalf of banks.

It said that students and jobseekers could be especially vulnerable.

Some 19% of students who had been approached had agreed to become money mules.

“It’s a very serious problem,” warns DCI Dave Carter, an investigator from Financial Fraud Action.

“Almost every single criminal transaction that goes on depends on money mules, to turn the money from crime into something the criminals can spend themselves.”

How it works

Continue reading the main story

It just makes you feel sick. I don’t want it to happen again.”

End Quote Kayleigh Rance job-seeker

The fraudsters contact likely targets by sending out mass emails offering employment, or after sifting through CVs posted by job seekers on employment websites.

Then they offer jobs as “money transfer agents”, “payment processing agents” or “administration assistants” for salaries of hundreds of pounds a week.

It looks like a proper job offer, but the real purpose is to channel cash from criminal activity through a person’s own bank account, making them the fraudster’s money mule.

Kayleigh Rance has been hunting for work for a year. She was taken in and even signed a contract. Then, luckily, she pulled out.

“It just makes you feel a bit sick,” she complains, “I feel like I’ve got to go through all the websites now and take my CV off because I don’t want it to happen again.”

The dirty cash comes from credit card fraud, money stolen from bank accounts and other rip-offs.

Paying it into the money mule’s account disguises where it comes from. The mule transfers it to an account in an overseas bank, controlled by the fraudster. It is classic money laundering.

Some money mules are paid by a straightforward cut of the cash being handled. A typical share would be 8%.

Campaign

The first mules tended to be new entrants to the UK, processing funds generated by crime within their own communities in London and other major cities.

But the power of the internet has allowed the perpetrators to start targeting other groups, including students desperate to earn some extra cash.

Financial Fraud Action commissioned ICM to question 2,000 adults along with separate groups exclusively made up of students, jobseekers and new entrants to the UK.

Around 15% had received the suspect job offers. Overall 6% of those who had been approached accepted the offers, rising to 13% of the unemployed, 19% of students and 20% of new entrants.

Crimestoppers is running a campaign in universities across the UK to warn students not to be fooled into becoming involved, telling them: “Don’t be a mule!”.

‘Colossal risk’

Megan Owen, who is studying criminology, volunteered to help at one recent event in Birmingham City University.

“Lots of students we approached said they’d been affected or their friends had been affected,” she said.

Extrapolating from its survey, Financial Fraud Action concludes that 380,000 people could have become unwitting money mules.

The figure is a stab in the dark, but it is clear that the problem is becoming worse and that few of those who become involved understand the risks they are running.

Their bank accounts could be frozen. If prosecuted, they could be sent to prison for up to 10 years.

“It’s a colossal risk,” warns DCI Carter. “In fact you are taking almost all the risk on behalf of the criminal. That’s why they ask – the money mules are the ones most likely to be caught.”

BBC News – Business

Title Post: Warning about student ‘money mules’
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Warning about student ‘money mules’

25 February 2013 Last updated at 19:03 ET

By Simon Gompertz Personal finance correspondent, BBC News

Fraud experts are warning that hundreds of thousands of people are in danger of being duped into laundering money for fraudsters.

They are being recruited as unwitting “money mules” who allow their own bank accounts to be used to disguise the proceeds of crime.

The study was carried out by Financial Fraud Action, which tackles fraud on behalf of banks.

It said that students and jobseekers could be especially vulnerable.

Some 19% of students who had been approached had agreed to become money mules.

“It’s a very serious problem,” warns DCI Dave Carter, an investigator from Financial Fraud Action.

“Almost every single criminal transaction that goes on depends on money mules, to turn the money from crime into something the criminals can spend themselves.”

How it works

Continue reading the main story

It just makes you feel sick. I don’t want it to happen again.”

End Quote Kayleigh Rance job-seeker

The fraudsters contact likely targets by sending out mass emails offering employment, or after sifting through CVs posted by job seekers on employment websites.

Then they offer jobs as “money transfer agents”, “payment processing agents” or “administration assistants” for salaries of hundreds of pounds a week.

It looks like a proper job offer, but the real purpose is to channel cash from criminal activity through a person’s own bank account, making them the fraudster’s money mule.

Kayleigh Rance has been hunting for work for a year. She was taken in and even signed a contract. Then, luckily, she pulled out.

“It just makes you feel a bit sick,” she complains, “I feel like I’ve got to go through all the websites now and take my CV off because I don’t want it to happen again.”

The dirty cash comes from credit card fraud, money stolen from bank accounts and other rip-offs.

Paying it into the money mule’s account disguises where it comes from. The mule transfers it to an account in an overseas bank, controlled by the fraudster. It is classic money laundering.

Some money mules are paid by a straightforward cut of the cash being handled. A typical share would be 8%.

Campaign

The first mules tended to be new entrants to the UK, processing funds generated by crime within their own communities in London and other major cities.

But the power of the internet has allowed the perpetrators to start targeting other groups, including students desperate to earn some extra cash.

Financial Fraud Action commissioned ICM to question 2,000 adults along with separate groups exclusively made up of students, jobseekers and new entrants to the UK.

Around 15% had received the suspect job offers. Overall 6% of those who had been approached accepted the offers, rising to 13% of the unemployed, 19% of students and 20% of new entrants.

Crimestoppers is running a campaign in universities across the UK to warn students not to be fooled into becoming involved, telling them: “Don’t be a mule!”.

‘Colossal risk’

Megan Owen, who is studying criminology, volunteered to help at one recent event in Birmingham City University.

“Lots of students we approached said they’d been affected or their friends had been affected,” she said.

Extrapolating from its survey, Financial Fraud Action concludes that 380,000 people could have become unwitting money mules.

The figure is a stab in the dark, but it is clear that the problem is becoming worse and that few of those who become involved understand the risks they are running.

Their bank accounts could be frozen. If prosecuted, they could be sent to prison for up to 10 years.

“It’s a colossal risk,” warns DCI Carter. “In fact you are taking almost all the risk on behalf of the criminal. That’s why they ask – the money mules are the ones most likely to be caught.”

BBC News – Business

Title Post: Warning about student ‘money mules’
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Warning about student ‘money mules’

25 February 2013 Last updated at 19:03 ET

By Simon Gompertz Personal finance correspondent, BBC News

Fraud experts are warning that hundreds of thousands of people are in danger of being duped into laundering money for fraudsters.

They are being recruited as unwitting “money mules” who allow their own bank accounts to be used to disguise the proceeds of crime.

The study was carried out by Financial Fraud Action, which tackles fraud on behalf of banks.

It said that students and jobseekers could be especially vulnerable.

Some 19% of students who had been approached had agreed to become money mules.

“It’s a very serious problem,” warns DCI Dave Carter, an investigator from Financial Fraud Action.

“Almost every single criminal transaction that goes on depends on money mules, to turn the money from crime into something the criminals can spend themselves.”

How it works

Continue reading the main story

It just makes you feel sick. I don’t want it to happen again.”

End Quote Kayleigh Rance job-seeker

The fraudsters contact likely targets by sending out mass emails offering employment, or after sifting through CVs posted by job seekers on employment websites.

Then they offer jobs as “money transfer agents”, “payment processing agents” or “administration assistants” for salaries of hundreds of pounds a week.

It looks like a proper job offer, but the real purpose is to channel cash from criminal activity through a person’s own bank account, making them the fraudster’s money mule.

Kayleigh Rance has been hunting for work for a year. She was taken in and even signed a contract. Then, luckily, she pulled out.

“It just makes you feel a bit sick,” she complains, “I feel like I’ve got to go through all the websites now and take my CV off because I don’t want it to happen again.”

The dirty cash comes from credit card fraud, money stolen from bank accounts and other rip-offs.

Paying it into the money mule’s account disguises where it comes from. The mule transfers it to an account in an overseas bank, controlled by the fraudster. It is classic money laundering.

Some money mules are paid by a straightforward cut of the cash being handled. A typical share would be 8%.

Campaign

The first mules tended to be new entrants to the UK, processing funds generated by crime within their own communities in London and other major cities.

But the power of the internet has allowed the perpetrators to start targeting other groups, including students desperate to earn some extra cash.

Financial Fraud Action commissioned ICM to question 2,000 adults along with separate groups exclusively made up of students, jobseekers and new entrants to the UK.

Around 15% had received the suspect job offers. Overall 6% of those who had been approached accepted the offers, rising to 13% of the unemployed, 19% of students and 20% of new entrants.

Crimestoppers is running a campaign in universities across the UK to warn students not to be fooled into becoming involved, telling them: “Don’t be a mule!”.

‘Colossal risk’

Megan Owen, who is studying criminology, volunteered to help at one recent event in Birmingham City University.

“Lots of students we approached said they’d been affected or their friends had been affected,” she said.

Extrapolating from its survey, Financial Fraud Action concludes that 380,000 people could have become unwitting money mules.

The figure is a stab in the dark, but it is clear that the problem is becoming worse and that few of those who become involved understand the risks they are running.

Their bank accounts could be frozen. If prosecuted, they could be sent to prison for up to 10 years.

“It’s a colossal risk,” warns DCI Carter. “In fact you are taking almost all the risk on behalf of the criminal. That’s why they ask – the money mules are the ones most likely to be caught.”

BBC News – Business

Title Post: Warning about student ‘money mules’
Url Post: http://www.news.fluser.com/warning-about-student-money-mules/
Link To Post : Warning about student ‘money mules’
Rating:
100%

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5 user reviews.
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Warning about student ‘money mules’

25 February 2013 Last updated at 19:03 ET

By Simon Gompertz Personal finance correspondent, BBC News

Fraud experts are warning that hundreds of thousands of people are in danger of being duped into laundering money for fraudsters.

They are being recruited as unwitting “money mules” who allow their own bank accounts to be used to disguise the proceeds of crime.

The study was carried out by Financial Fraud Action, which tackles fraud on behalf of banks.

It said that students and jobseekers could be especially vulnerable.

Some 19% of students who had been approached had agreed to become money mules.

“It’s a very serious problem,” warns DCI Dave Carter, an investigator from Financial Fraud Action.

“Almost every single criminal transaction that goes on depends on money mules, to turn the money from crime into something the criminals can spend themselves.”

How it works

Continue reading the main story

It just makes you feel sick. I don’t want it to happen again.”

End Quote Kayleigh Rance job-seeker

The fraudsters contact likely targets by sending out mass emails offering employment, or after sifting through CVs posted by job seekers on employment websites.

Then they offer jobs as “money transfer agents”, “payment processing agents” or “administration assistants” for salaries of hundreds of pounds a week.

It looks like a proper job offer, but the real purpose is to channel cash from criminal activity through a person’s own bank account, making them the fraudster’s money mule.

Kayleigh Rance has been hunting for work for a year. She was taken in and even signed a contract. Then, luckily, she pulled out.

“It just makes you feel a bit sick,” she complains, “I feel like I’ve got to go through all the websites now and take my CV off because I don’t want it to happen again.”

The dirty cash comes from credit card fraud, money stolen from bank accounts and other rip-offs.

Paying it into the money mule’s account disguises where it comes from. The mule transfers it to an account in an overseas bank, controlled by the fraudster. It is classic money laundering.

Some money mules are paid by a straightforward cut of the cash being handled. A typical share would be 8%.

Campaign

The first mules tended to be new entrants to the UK, processing funds generated by crime within their own communities in London and other major cities.

But the power of the internet has allowed the perpetrators to start targeting other groups, including students desperate to earn some extra cash.

Financial Fraud Action commissioned ICM to question 2,000 adults along with separate groups exclusively made up of students, jobseekers and new entrants to the UK.

Around 15% had received the suspect job offers. Overall 6% of those who had been approached accepted the offers, rising to 13% of the unemployed, 19% of students and 20% of new entrants.

Crimestoppers is running a campaign in universities across the UK to warn students not to be fooled into becoming involved, telling them: “Don’t be a mule!”.

‘Colossal risk’

Megan Owen, who is studying criminology, volunteered to help at one recent event in Birmingham City University.

“Lots of students we approached said they’d been affected or their friends had been affected,” she said.

Extrapolating from its survey, Financial Fraud Action concludes that 380,000 people could have become unwitting money mules.

The figure is a stab in the dark, but it is clear that the problem is becoming worse and that few of those who become involved understand the risks they are running.

Their bank accounts could be frozen. If prosecuted, they could be sent to prison for up to 10 years.

“It’s a colossal risk,” warns DCI Carter. “In fact you are taking almost all the risk on behalf of the criminal. That’s why they ask – the money mules are the ones most likely to be caught.”

BBC News – Business

Title Post: Warning about student ‘money mules’
Url Post: http://www.news.fluser.com/warning-about-student-money-mules/
Link To Post : Warning about student ‘money mules’
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment

Read More..

Warning about student ‘money mules’

25 February 2013 Last updated at 19:03 ET

By Simon Gompertz Personal finance correspondent, BBC News

Fraud experts are warning that hundreds of thousands of people are in danger of being duped into laundering money for fraudsters.

They are being recruited as unwitting “money mules” who allow their own bank accounts to be used to disguise the proceeds of crime.

The study was carried out by Financial Fraud Action, which tackles fraud on behalf of banks.

It said that students and jobseekers could be especially vulnerable.

Some 19% of students who had been approached had agreed to become money mules.

“It’s a very serious problem,” warns DCI Dave Carter, an investigator from Financial Fraud Action.

“Almost every single criminal transaction that goes on depends on money mules, to turn the money from crime into something the criminals can spend themselves.”

How it works

Continue reading the main story

It just makes you feel sick. I don’t want it to happen again.”

End Quote Kayleigh Rance job-seeker

The fraudsters contact likely targets by sending out mass emails offering employment, or after sifting through CVs posted by job seekers on employment websites.

Then they offer jobs as “money transfer agents”, “payment processing agents” or “administration assistants” for salaries of hundreds of pounds a week.

It looks like a proper job offer, but the real purpose is to channel cash from criminal activity through a person’s own bank account, making them the fraudster’s money mule.

Kayleigh Rance has been hunting for work for a year. She was taken in and even signed a contract. Then, luckily, she pulled out.

“It just makes you feel a bit sick,” she complains, “I feel like I’ve got to go through all the websites now and take my CV off because I don’t want it to happen again.”

The dirty cash comes from credit card fraud, money stolen from bank accounts and other rip-offs.

Paying it into the money mule’s account disguises where it comes from. The mule transfers it to an account in an overseas bank, controlled by the fraudster. It is classic money laundering.

Some money mules are paid by a straightforward cut of the cash being handled. A typical share would be 8%.

Campaign

The first mules tended to be new entrants to the UK, processing funds generated by crime within their own communities in London and other major cities.

But the power of the internet has allowed the perpetrators to start targeting other groups, including students desperate to earn some extra cash.

Financial Fraud Action commissioned ICM to question 2,000 adults along with separate groups exclusively made up of students, jobseekers and new entrants to the UK.

Around 15% had received the suspect job offers. Overall 6% of those who had been approached accepted the offers, rising to 13% of the unemployed, 19% of students and 20% of new entrants.

Crimestoppers is running a campaign in universities across the UK to warn students not to be fooled into becoming involved, telling them: “Don’t be a mule!”.

‘Colossal risk’

Megan Owen, who is studying criminology, volunteered to help at one recent event in Birmingham City University.

“Lots of students we approached said they’d been affected or their friends had been affected,” she said.

Extrapolating from its survey, Financial Fraud Action concludes that 380,000 people could have become unwitting money mules.

The figure is a stab in the dark, but it is clear that the problem is becoming worse and that few of those who become involved understand the risks they are running.

Their bank accounts could be frozen. If prosecuted, they could be sent to prison for up to 10 years.

“It’s a colossal risk,” warns DCI Carter. “In fact you are taking almost all the risk on behalf of the criminal. That’s why they ask – the money mules are the ones most likely to be caught.”

BBC News – Business

Title Post: Warning about student ‘money mules’
Url Post: http://www.news.fluser.com/warning-about-student-money-mules/
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Markets fall on Italy deadlock fear

25 February 2013 Last updated at 17:21 ET

Continue reading the main story

Markets have fallen in anticipation of political deadlock in Italy following parliamentary elections there.

Exit polls suggest the centre-left has won a lower house majority, while early count data gave Silvio Berlusconi’s centre-right the lead in the Senate.

Global bank shares, the euro, and Italy’s bond and stock markets fell back on fear the results may unleash new financial stress in the eurozone.

Mr Berlusconi quit as Prime Minister in 2011 amid a major financial crisis.

At the time, markets had lost confidence in his ability to push through spending cuts and difficult labour market reforms deemed necessary to revive Italy’s economy.

The Rome government was faced with spiralling borrowing costs in the bond markets, while the country’s banks were forced to turn to the European Central Bank for emergency loans.

The elections follow the end of the caretaker premiership of technocratic Prime Minister Mario Monti, who took over from Mr Berlusconi and pushed through a plethora of unpopular economic reforms, that helped regain the markets’ trust.

Deadlock concerns

The Milan bourse, which had been up 4% for the day in mid-afternoon trading, gave up its gains as the early Senate results came through, ending the day only 0.7% higher.

Italian bank stocks, which had surged more than 7% on hopes of a stable centre-left coalition government under Pier Luigi Bersani, also gave up most of their gains.

The negative tone continued into US trading hours, with the Dow Jones falling steadily from mid-morning, to finish the day 1.6% lower.

US banks were also badly hit by concern that a failure by the new Italian government to get to grips with the country’s heavy debt burden could lead to renewed stress in the international banking system.

Morgan Stanley fell 6.6%, Citigroup 3.8%, Bank of America 3.6% and JP Morgan 2.5%.

On the bond markets, Italy’s cost of borrowing ended Monday fractionally higher at 4.49% per year, from 4.33% at the end of Friday, as the perceived riskiness of lending to the government rose.

The implied yearly cost of borrowing had fallen to 4.17% at one point, before news of the Senate results arrived.

Meanwhile, on the currency markets, the euro – which had gained a cent against the dollar to $ 1.33 at one point – fell back again to $ 1.306, as hopes for greater political stability evaporated.

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Video: What Percentage of Revenue Does Apple Get From Mac?

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Feb. 21 (Bloomberg) — Today’s “BWest Byte” is 15%, for the percentage of revenue Apple gets from the Mac. Jon Erlichman reports on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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12 Amazing Twitpics From Space

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Drop in new homes prompts fears

21 February 2013 Last updated at 13:30 ET

The government needs to act now to make sure enough affordable homes are being built, campaign groups have said, after figures showed the number of housing starts in England fell 11% in 2012.

Housing charity Shelter said the government faced a “housing crisis” unless immediate action was taken.

The National Housing Federation also said more needed to be done to meet the huge demand for affordable homes.

A spokesperson for the government said ministers were “far from complacent”.

The Home Builders Federation said it was “still a challenging environment” in which to build homes.

“A lack of mortgage finance is the most important short-term issue and if buyers can’t buy, builders can’t build.

“But we have seen a much more positive start to the new year with an easing in lending and schemes like the government’s NewBuy enabling people to get a 95% mortgage,” the group said.

‘Unlock finances’

Latest figures from the Department for Communities and Local Government (DCLG) showed the number of new builds started in England fell to 98,280 in 2012.

The number of housing starts peaked at 183,000 in the year ending March 2006, but fell sharply in the downturn to a low of 75,000 in the year ending June 2009.

Since then starts have recovered somewhat to about 110,000 per year, but DCLG said recent quarters had seen them slip back again.

However, the most recent quarter, ending in December, saw a 1% rise compared with the previous three months.

David Orr, chief executive of the National Housing Federation, said: “Despite the current tough economic environment, the small signs of increased house building are encouraging – but more needs to be done across the whole sector to meet the huge need for more affordable homes.

“We expect housing associations, who are dealing with a radically new investment framework and a huge cut in funding for affordable housing, to continue finding innovative new ways to meet that demand.”

Campbell Robb, chief executive of Shelter, urged the government to use next month’s Budget to unlock the finance to deliver more affordable family homes.

“Unless action is taken now, it’s hard to see our housing crisis improving any time soon,” he said.

A DCLG spokesman said the latest figures showed “steady improvement” compared with the previous quarter.

He said: “The government is far from complacent, which is why, despite the need to tackle the deficit, we’re investing £19.5bn public and private funding in an affordable housing programme set to deliver 170,000 homes, putting £1.3bn into unlocking stalled sites and building the infrastructure we need and making enough formerly used, surplus public sector land available to deliver 33,000 new homes.”

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Citi Chairman O’Neill not pressing for bank breakup: WSJ

(Reuters) – Citigroup Inc chairman Michael O’Neill is not eager to explore a breakup of the third-largest U.S. bank, the Wall Street Journal reported, citing people familiar with the matter.

O’Neill was among a small group of directors who urged Citi to consider the benefits of splitting the bank after the financial crisis.

But he has concluded that breaking up Citigroup doesn’t make sense now, given economic and regulatory uncertainty, the Journal quoted the people as saying.

(Reporting by Aman Shah in Bangalore; Editing by Cynthia Osterman)

Economy News Headlines – Yahoo! News

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France facing up to minimal economic growth this year

PARIS/ATHENS (Reuters) – President Francois Hollande acknowledged on Tuesday that France will miss its 0.8 percent 2013 growth target, hours after his foreign minister said the growth rate could come in at less than half that level.

Laurent Fabius told RTL radio that French growth this year would be no better than around 0.2 to 0.3 percent.

It was the second time in a matter of days that Fabius, a prime minister in the 1980s and one of the most senior members of the government, let the truth slip about France’s economic outlook after revealing last week that the deficit goal would be missed.

“Since on the European level things don’t seem to be going so well, we will be obliged to lower it,” Fabius said of the growth target.

Hollande’s confirmation that the target would be missed – made during a visit to Greece – will add to concerns that the euro zone’s second-largest economy is on the brink of recession.

Data last week showed it shrank in the final quarter of 2012.

“For 2013, everyone knows we will not reach the 0.8 percent that was predicted,” Hollande told a joint news conference with Greek Prime Minister Antonis Samaras.

He said France would wait for the European Commission’s new economic outlook, due on Friday, before issuing a new target at the end of March.

The admission that the growth goal will be missed, having already been cut in September from an initial target of 1.2 percent, also pushes France’s deficit-cutting goals further out of reach.

The government has defended its growth and deficit goals for months against misgivings from economists, as it battles to maintain credibility with EU partners and rating agencies, but admitted last week it would fail to cut the 2013 public deficit to within an EU ceiling of 3 percent of GDP.

“We’re one of the countries that today, in terms of growth plans or in any case activity, is in the least bad situation,” Hollande said. “But we’re far from our goals.”

French benchmark 10-year bond yields, however, were barely changed at 2.26 percent. For all its economic problems, investors still treat France as a core euro zone economy.

Bank of France Governor Christian Noyer told the Wall Street Journal that the French government should maintain its current plans for its finances this year and clarify where spending cuts could come from in the future.

“If there is a small nominal distance from the 3 percent but a significant effort on public spending, it is something that will be understood and appreciated by markets,” Noyer said, referring to the EU ceiling for deficits at 3 percent of GDP.

He also said France should avoid hurting businesses by cutting spending on pensions instead of boosting taxes, according to the WSJ.

MORE SPENDING CUTS LOOM

Fabius said that the missed target meant additional savings would be required at both the national and regional levels, without giving details.

On Monday, Finance Minister Pierre Moscovici would not comment on a media report the Socialist government may add some 5 billion euros ($ 6.68 billion) onto the 60 billion euros in spending cuts it is already targeting over five years.

He said Paris could tweak its fiscal plans after talking to the Commission about its new outlook.

Conservative politicians accused the government of bungled communications, after Fabius appeared for the second time to pre-empt an official revision to economic targets which would usually come from the president, prime minister or finance ministry.

Prime Minister Jean-Marc Ayrault – who was forced last week to respond to Fabius’ remark on the deficit and acknowledge the minister was correct – played down the muddle.

“There is no cacophony,” Ayrault told reporters in Paris.

“The European Commission will announce its growth estimates for France and each European country on Friday. The government will then announce the decision it will take.”

(Additional reporting by Mark John; Editing by Catherine Bremer, Jeremy Gaunt and Cynthia Osterman)

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Nestle finds horsemeat in beef meals

18 February 2013 Last updated at 19:00 ET

Nestle, the world’s biggest food company, has removed beef pasta meals from shelves in Italy and Spain after tests revealed traces of horse DNA.

The Swiss-based firm has halted deliveries of products containing meat from a German supplier.

Nestle is the latest in a string of major food producers to find traces of horsemeat in beef meals.

A spokesman for the company said levels of horse DNA were very low but above 1%.

Last week the firm said its products did not contain horsemeat.

Nestle withdrew two chilled pasta products, Buitoni Beef Ravioli and Beef Tortellini, in Italy and Spain.

Lasagnes a la Bolognaise Gourmandes, a frozen product for catering businesses produced in France, will also be withdrawn.

A spokesman for the company told the BBC that Nestle had identified a problem with a supplier from Germany.

A statement on the Nestle website identifies the supplier as HJ Schypke, a sub-contractor of JBS Toledo, a major meat processing company.

Nestle would now be running tests on all its beef, the spokesman said.

Continue reading the main story

• In mid-January, Irish food inspectors announced they had found horsemeat in some burgers stocked by UK supermarket chains


• Subsequently, up to 100% horsemeat found in several ranges of prepared frozen food in Britain, France and Sweden


• Concerns that a drug used to treat horses, and which may be harmful to humans, could be in food chain


• Meat traced from France through Cyprus and The Netherlands to Romanian abattoirs


• Investigation suggests adulteration was not accidental but the work of a criminal conspiracy

The widening scandal over mislabelled horsemeat has affected at least 12 European countries.

Earlier on Monday, France partially lifted a production ban for meat processing firm Spanghero, one of the companies at the heart of the scandal.

The French government revoked its licence last week over suspicions that Spanghero knowingly sold horsemeat labelled as beef, an allegation the company rejects.

The French authorities said that unwitting workers should not be penalised.

As a result the firm will be allowed to produce minced meat, sausages and ready-to-eat meals, but not to stock frozen meat.

Meanwhile the UK and Germany have also both pledged to step up testing of frozen food products.

BBC News – Business

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Alexa von Tobel May Be the Next Suze Orman

(Corrects description of von Tobel’s degree)

Alexa von Tobel walked out of a blizzard and into her Greenwich Village office space on Feb. 8, brewed a cup of tea, and recited a list of her appearances in 2013. There was the design conference panel in Munich, a speech to the William Morris Endeavor staff in California, a Today show spot in New York—each time, she spoke on the topic of personal finance. In the past eight days, Von Tobel says, she’s been to four cities, and after the weekend she’s due to guest-teach a class at the University of Maryland. “That’s sort of a normal week in my life, just to give you a sense,” she says, bobbing the tea bag.

Von Tobel, 29, is the founder and chief executive officer of LearnVest, a four-year-old startup that in September became a registered investment adviser with the Securities and Exchange Commission—the latest personal finance site to go beyond offering simple budgeting tools to advising clients directly on what to do with their money. Services such as Mint.com have become popular with features that track users’ purchases and spit out pie charts on retirement progress. LearnVest offers the same features, but now clients who pay a setup fee (as much as $ 399) and then $ 19 a month can call or e-mail the staff of certified financial planners for personalized guidance. The advisers don’t recommend specific stocks or mutual funds, but they will work with customers to tailor their strategies on portfolio balancing, retirement, estate planning, and other topics. The company, which declines to say how many paid customers it has, says the site has a total user base of a few hundred thousand. Advisers earn a flat salary, with bonuses tied to customer satisfaction.

At the same time that banks are rediscovering wealth management for millionaire clients as a lucrative, low-risk business, a handful of startups are attempting to broaden the category to include the not-quite-so-rich, with assets in the six figures or less. Von Tobel’s firm faces some formidable competition, including Personal Capital, the brainchild of former PayPal (EBAY) and Intuit (INTU) CEO Bill Harris, and NestWise, backed by LPL Financial (LPLA), an organization of some 13,000 financial advisers managing $ 373 billion in assets.

In the crowded personal finance category, LearnVest initially drew attention thanks to Von Tobel’s shrewd decision to focus on women. It helped distinguish the site, attracted investors, and made Von Tobel into a rising media star as an expert on women, budgets, and the psychology of spending and saving. As a result, sometimes it’s difficult to tell which is the more successful product, LearnVest or Von Tobel herself.

A former trader at Morgan Stanley (MS), Von Tobel quit Harvard Business School to start LearnVest in 2008. Despite the recession, she lined up seed funding from three high-ranking Goldman Sachs Group (GS) veterans who had formed Circle Financial Group, an organization of women investors. One of the founders, Ann Kaplan, had led a Goldman Sachs group that concentrated on women clients; she’s now LearnVest’s chairman. Subsequent funding came in two rounds from Accel Partners, for a total of slightly less than $ 25 million.

Along the way, Von Tobel has appeared on a torrent of TV shows and magazine lists—Inc.’s “30 Under 30: America’s Coolest Young Entrepreneurs,” Vanity Fair’s “Next Establishment” index, Marie Claire’s “18 Women Changing the World.” Random House will publish her first book, a guide to getting one’s financial house in order, later this year, and a monthly money column begins in the next issue of Cosmopolitan. She met Cosmo Editor in Chief Joanna Coles at an event at Ruth’s Chris Steak House (RUTH) in New York, answering audience questions about the psychology of spending. “At the end of it, there was a line down the stairs of the restaurant,” Coles says. “When you talk to her, it’s a bit like talking to a Roman candle, just fully on fire, and all sorts of interesting colors are coming out of her.”

For a startup still getting off the ground, and now employing financial planners across the country, the free publicity is invaluable; that’s equally true for Von Tobel. If the company goes bust, the business of being her is still well capitalized. “Clearly she should have her own television show,” Coles says. “And she’d be very good advising big financial companies on how to approach women.”

LearnVest’s board and formal advisers include executives with ties to Goldman Sachs, Omnicom Group (OMC), and dot-coms such as EHarmony, the Huffington Post, and DailyCandy. “Because of her connections, starting with Kaplan, she was one step, two steps closer to bookers, producers, editors who would put her in magazines,” says adviser Betsy Morgan, president of TheBlaze, Glenn Beck’s website. Von Tobel approached Morgan when she was CEO of the Huffington Post. “I thought she was enormously strategic,” Morgan says. “ ‘How do I think about getting brand awareness, how do I think about media, how do I think about PR?’ It’s really nice to be able to say to your mom, ‘Hey, I’m on the Today show’—but it’s more meaningful to say, ‘I picked up X number of customers.’ ”

Von Tobel grew up in Florida and graduated from Harvard College (her thesis was magna cum laude plus) in 2006, during a period that produced a burst of entrepreneurialism among women there. Plus, unusual similarity in first names: Alexa Hirschfeld launched Paperless Post, a classier Evite, in 2008, and Alexis Maybank and Alexandra Wilkis Wilson co-founded Gilt Groupe, the luxury e-tailer, in 2007. In New York’s small venture capital sphere, their cluster of beau monde enterprisers is even tinier. Von Tobel’s wedding this spring will feature a Paperless Post bridesmaid and the co-founder of Dannijo, a jewelry line that does its marketing on social media, as maid of honor.

Even competitors are impressed with LearnVest. “They’re a comrade in arms, they’re another of the couple of players that are trying to use connected tech to change the way financial advice and financial services are delivered,” says Personal Capital’s Harris. The challenge for LearnVest now is whether the safe, universal guidelines it has been dispensing to users—pay off high-interest debt first, save up an emergency fund—can translate into individually tailored advice on taxes and how to balance a mixture of stocks and bonds. Von Tobel thinks the market is large: Ninety-nine percent of Americans have less than $ 1 million in assets, she is fond of saying, and few feel they have a source of reliable, independent financial counsel. “I’ve never sat across from someone who hasn’t been like, ‘My mom needs this,’ or ‘Wow, my husband and I need to get this immediately,’ ” Von Tobel says.

She recently passed the 10-hour CFP exam and three-hour Series 65 exam—the latter a Financial Industry Regulatory Authority test that qualifies her to dispense paid investment advice. Von Tobel says she took 15 calls in the previous week from LearnVest customers, ranging from the well-off to some in dire straits. One memorable conversation came with a user who had lost her job and wanted to create a financial plan before breaking the news to her family. “This is a genuine, genuine passion, and so this isn’t an upbeat persona that I have to really put on,” says Von Tobel. “The world could fall apart around me, our money could go away, and I would still be sitting here doing the exact same thing.”

The bottom line: With LearnVest, Von Tobel is creating a financial advisory service for the masses—and her own brand as a media star.

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Wireless Spectrum is Invisible River of Gold

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Feb. 15 (Bloomberg) — Spectrum is one of the most important parts of your digital life that you probably know very little about. So, what is it? And why are wireless carriers so obsessed with it? Bloomberg Businessweek’s Sam Grobart explains.

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Q&A: Currency the latest threat to global economy

LONDON (AP) — The world economy faces a new threat. Instead of a banking collapse or too much debt, fears are growing that countries are using their currencies as an economic weapon.

History suggests that’s never a good thing.

If too many countries try to weaken their currencies for economic gain — sparking a “currency war” — that could stifle business confidence and investment, sow turmoil in financial markets and derail a fragile global economy.

As financial representatives from the world’s leading 20 industrial and developing nations gather for a meeting in Moscow this weekend, those concerns are being openly discussed.

“All the members of G20 need to deliver on a commitment to move towards a market-determined exchange rate and refrain from competitive devaluation,” U.S. Treasury Undersecretary Lael Brainard warned Friday.

Why is everyone talking about currencies?

— Since the start of the financial crisis, central banks around the world have been trying to stimulate their economies by keeping interest rates extremely low. The goal is to encourage consumers and businesses to borrow and spend more. One way central banks drive down rates is to use their power to print money to buy up large quantities of bonds. But by boosting the amount of currency in circulation, there is a side effect: it can drive down the value of that currency relative to others.

As a country’s currency falls, its exports become cheaper, while those of its neighbors become relatively more expensive.

Japan, the world’s third-largest economy, is currently under the harshest spotlight. To get its economy motoring again after a two-decade bout of stagnation, the government has said it would like to see inflation move higher. Markets have interpreted this as a signal that Japan’s central bank is prepared to take actions that would result in driving down the yen, to boost exports and also put upward pressure on prices. Earlier this week, the yen fell to a 21-month low against the dollar and a near three-year trough against the euro.

So is Japan actively trying to weaken the yen?

— Yes and no. Though it’s not directly intervening in the foreign exchange markets by selling yen and buying other currencies, strong comments from the new Japanese government have convinced markets that the Bank of Japan will create more money. Japan’s Finance Minister Taro Aso insists the government isn’t focused on exchange rates, but he has noted that the weakening yen has “brought huge benefits to the export sector” and that the world “has been awed” by the recent surge in share prices.

Why is that bad?

— A falling yen will help exporters, such as Sony and Toyota, and boost Japan’s economy. And it will it tend to push prices – and ultimately wages — higher. But if other countries respond to the falling yen by devaluing their currencies — to maintain the competitiveness of their own exports — Japan will be back to square one and the world economy could suffer.

Sharp fluctuations in the value of currencies can hurt business confidence and investment. Prices for imported raw materials and components would be volatile, profits will be hard to come by as prices fluctuate wildly and the value of any investment a company makes in another country could quickly be wiped out.

Who’s been feeling the effect of Japan’s actions so far?

— The euro, the single currency used by the 17-strong group of European Union countries, has seen the biggest move on the foreign exchange markets. As the region moved on from its crippling debt crisis last summer, the euro has slowly gained in value. But since the change of government in Japan, its value against leading currencies such as the yen and U.S. dollar has shot up — last December it was worth 113.19 yen and $ 1.29 and now it’s at 124.93 yen and $ 1.33.

A rise in the value of the euro will do little to help the eurozone’s businesses — and will hardly help getting it growing again. Figures Thursday showed that the economic output of the region shrank at an annualized rate of around 2.5 percent in the last quarter of 2012.

What’s been the reaction from other major economies?

— Politicians have voiced concerns about the euro’s rise versus other major currencies — most notably French President Francois Hollande, who indicated he was open to calls for a more managed exchange rate. European Central Bank President Mario Draghi said last week that the bank will monitor the economic impact of the euro’s rising value. Several analysts took that to mean the ECB could cut interest rates to bolster growth, which in theory could weaken the euro — an indirect tit-for-tat response to the yen’s fall, some say.

Earlier this week, the volatility in the currency markets prompted the Group of Seven leading industrial nations, which includes the U.S, Germany as well as Japan, to warn that volatile movements in exchange rates could adversely hit the global economy. The group reaffirmed its commitment to market-driven exchange rates.

Might other countries try to manipulate their currencies in response to Japan?

— There is no sign of that — so far. Speaking in Moscow, International Monetary Fund Director Christine Lagarde dismissed the possibility of an international currency conflict, saying that “the current talk of currency war is overblown.”

But a country fixing the value of its currency is not without precedent.

In Sept. 2011, Switzerland took action to arrest the rise of its currency, the Swiss franc. The rise was triggered by the debt crisis in the eurozone — investors were looking for somewhere safe to park their cash and the Swiss franc has traditionally fulfilled that role. The Swiss intervention was viewed as an attempt to protect the country’s exporters.

U.S. politicians have for years accused China of keeping its currency, the renminbi, artificially weak in order to industrialize fast. And many countries believe the U.S. long ago abandoned the “strong dollar” policy in a dash for growth.

How bad could a currency war get?

— Since World War II, one of the key objectives of international economic policymaking has been to avoid a repeat of the 1930s, when countries around the world engaged in a tit-for-tat battle with their exchange rates. That decimated global trade, accentuating the depression and providing another catalyst to war.

Assuming the world doesn’t descend into a similar abyss, a currency war can still harm the global economy. For example, central banks, particularly in the developing world, may resort to controlling the amount of capital that can be moved out of a country to affect exchange rates.

“Increasing impediments to the free flow of capital might be thought to lower the potential growth of the world economy,” said Stephen Lewis, chief economist at Monument Securities.

Can the world’s leaders and central bankers calm the situation?

— No doubt, a communique will emerge from this weekend’s G-20 meeting in Moscow that pours scorn at competitive devaluations. Most of the action, though, is likely to take place behind-the-scenes with pressure expected to be put on the Japanese finance minister and central bank governor not to allow the yen to fall much further.

“Expect smoke and mirrors,” said Simon Evenett, a professor of economics at the University of St. Gallen in Switzerland and a former World Bank official. “It’s not the G-20′s style to point fingers.”

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Big hedge funds fueled fourth-quarter dive in Apple shares

BOSTON (Reuters) – Some of the biggest hedge funds that helped make Apple Inc a stock market darling lost faith and dumped their stakes in the fourth quarter, fueling the massive drop in the iPhone maker’s share price.

Noted stock pickers including Leon Cooperman, Eric Mindich and Thomas Steyer unloaded billions of dollars of Apple shares between September 30 and December 31, according to disclosure documents filed on Thursday.

Shares of Apple rose to an all-time high of $ 705.07 on September 21 but ended 2012 down more than 24 percent from that peak as investors worried about increasing competition and declining profit margins.

The shares also may have dropped because their price rose too much, too fast.

“The stock just went up so much in early 2012 and then was coming back to earth,” said Justin Walters, co-founder of Wall Street research firm Bespoke Investment Group. “Three months from now, we’ll be seeing a lot of the people who sold starting to pick it up again.”

The fourth-quarter sellers avoided even deeper losses. Apple’s shares have lost 12 percent so far this year. The shares lost 42 cents, or 0.1 percent, to close at $ 466.59 on the Nasdaq on Thursday.

Cooperman’s Omega Advisors fund dumped its entire stake of more than 266,000 shares during the fourth quarter, according to its required quarterly disclosure form filed with the Securities and Exchange Commission.

Mindich, named the youngest partner ever at Goldman Sachs before starting his Eton Park Capital Management fund in 2004, got out of Apple entirely in the fourth quarter after making big sales in the third quarter as well. Eton owned 600,000 shares at the beginning of 2012.

Farallon Capital, the hedge fund founded by Steyer, sold 137,000 shares. Steyer, who once worked on the Goldman Sachs risk arbitrage desk under Robert Rubin, stepped down at the end of the year from the firm, which he founded in 1986. Rubin served as U.S. Treasury secretary from 1995 to 1999.

Jana Partners, an activist fund run by Barry Rosenstein, also unloaded its entire Apple stake of more than 143,000 shares. Other notable sellers included Third Point LLC, which had owned 710,000 shares, Viking Global Investors, which dumped 1.1 million shares and Lone Pine Capital, which sold over 800,000 shares.

A much smaller line up of funds bought shares amid the stock’s crash. David Tepper’s Appaloosa Management nearly doubled its stake during the quarter to about 913,000 shares. George Soros more than doubled his stake to about 184,000 shares. And David Einhorn, who last week sued Apple in a bid for higher dividends, added 20 percent to his holdings to end the quarter with 1.3 million shares.

PROFITABLE TRADES

Despite the plunge in Apple’s stock price, most of the managers likely exited their positions with substantial profits because they bought years earlier.

Rosenstein and Cooperman, for example, both started gathering their stakes in the middle of 2010, when Apple shares traded below $ 300.

At the time, the company’s iPhone 4 was beset by alleged faulty reception, a problem that became known as “antennagate.” Apple’s then-chief executive, the late Steve Jobs, famously dismissed the issue, saying “we don’t think we have a problem.” But Apple offered customers a free bumper case that was supposed to minimize any issues.

Customers did not seem to care, snapping up millions of iPhones and sending Apple’s share price up almost 50 percent over the next year.

Apple came under further scrutiny last week from Greenlight’s Einhorn. Einhorn filed a lawsuit to block changes in Apple’s policy for issuing preferred stock. Instead, Apple should issue a new class of preferred stock to share more of its $ 137 billion cash hoard with shareholders, Einhorn said.

Apple Chief Executive Tim Cook dismissed the moves as a “silly sideshow” on Tuesday.

SOME TRIMMED

Not all well-known hedge fund fans of Apple cut ties in the fourth quarter. Some only trimmed their holdings.

Philippe Laffont, who worked under famed hedge fund manager Julian Robertson before striking out on his own at Coatue Management, sold about 18 percent of his Apple shares. Coatue ended the year with a still sizable 643,000 shares.

Chase Coleman, another manager who worked for Robertson, reduced the Apple stake at his Tiger Global Management fund by 19 percent to just over 1 million shares.

Robertson’s own Tiger Management LLC fund trimmed its Apple stake by 28 percent to about 42,000 shares.

Large hedge funds are required to disclose their U.S. stock holdings within 45 days after the end of each quarter.

But the filings may not give a complete picture of each fund’s moves, since only U.S.-listed shares and options must be revealed. Bonds, foreign shares and derivatives are not included, and short positions, or bets that a stock will fall in price, are not listed.

(Reporting by Aaron Pressman; Additional reporting by Katya Wachtel, Svea Herbst, Sam Forgione and Jennifer Ablan in New York; Editing by Steve Orlofsky and David Gregorio)

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UK ‘to avoid triple-dip recession’

12 February 2013 Last updated at 19:22 ET

The UK will avoid falling into a so-called triple-dip recession, according to the business lobby group, the CBI.

The group believes that the UK economy will grow 0.3% in the first quarter of the year.

That comes after the economy shrunk in the last quarter – the first period in what some feared might be another six months of negative growth.

But the CBI now expects the UK to grow 1% in 2013 – less than the 1.4% it previously expected.

“We are beginning to see the return of organic growth, with clear signs that firms offering the right products into the right markets are growing sales and expanding,” said CBI director-general John Cridland.

“Recent business surveys also give grounds for cautious optimism about our forward prospects.”

But he warned that “after the uncertainties of 2012, the fear of external storm clouds lingers”, referring to the eurozone debt crisis and weak global growth.

The business group said that inflation will likely climb during the year but it does not expect a further round of quantitative easing.

The Bank of England has so far pumped £375bn into the financial system, creating money through “asset purchases” of buying government bonds.

Earlier this month, the Organisation for Economic Co-operation and Development (OECD) said the Bank should consider injecting more money into the economy if growth remains weak.

The UK economy bounced back to growth in the third quarter of last year, boosted by the Olympics, after shrinking for the previous nine months. Prior to that, the UK was in recession at the height of the financial crisis in 2008.

If the economy were to also shrink in the first three months of 2013, then the UK would re-enter recession, defined as two consecutive quarters of contraction.

The UK has still not recovered the levels of output seen before 2008.

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Wall Street ends flat as investors seek new catalysts

NEW YORK (Reuters) – Stocks ended a quiet session with slight moves on Monday as investors found few reasons to keep pushing shares higher following a six-week advance, though the longer-term trend was still viewed as positive.

The benchmark index is up more 6.4 percent in 2013, putting both the S&P 500 and Dow industrials near multi-year highs. The S&P is less than 4 percent from its all-time intraday high of 1,576.09, hit in October 2007.

“This is still a market that looks terrific, but when you’re up for six weeks in a row, everyone is going to want to take a pause going into the seventh week even if there is no bad news out there,” said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.

Volume was light, with about 4.812 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, well below the daily average so far this year of about 6.48 billion shares.

Wall Street was modestly lower throughout the session but regained some ground in the final hour of trading as Google Inc rebounded off earlier losses. Shares of the Internet search giant dipped 0.4 percent to $ 782.42, recovering from earlier declines of 1 percent after the company said in a filing former chief executive Eric Schmidt is selling roughly 42 percent of his stake in the company.

Also in the tech space, Apple Inc rose up 1 percent to $ 479.93 after the New York Times reported the iPhone maker was experimenting with the design of a device similar to a wristwatch.

The Federal Reserve’s Vice Chair Janet Yellen, seen as a potential successor to Fed Chairman Ben Bernanke next year, said the Fed is still aggressively stimulating an anemic U.S. economic recovery that has failed to bring rapid progress on employment.

The Dow Jones industrial average <.dji> was down 21.81 points, or 0.16 percent, at 13,971.16. The Standard & Poor’s 500 Index <.spx> was down 0.92 points, or 0.06 percent, at 1,517.01. The Nasdaq Composite Index <.ixic> was down 1.87 points, or 0.06 percent, at 3,192.00.</.ixic></.spx></.dji>

Upbeat U.S. and Chinese data last week helped the S&P 500 extend its weekly winning streak to six. The index gained about 8 percent over that period.

Equities have been strong performers lately and many investors have used any declines in the market as opportunities to buy.

“Everyone wants to buy on a dip in this market, but if you’re on the sidelines right now, the decline we’re seeing today just isn’t the kind you would jump in on,” Kuby said.

President Barack Obama will describe his plan for spurring the economy in his State of the Union address on Tuesday. He is expected to offer proposals for investment in infrastructure, manufacturing, clean energy and education.

Opposition has grown to the $ 24.4 billion buyout of Dell Inc , the No. 3 personal computer maker, as three of the largest investors joined Southeastern Asset Management on Friday in raising objections. Dell said in a regulatory filing it had considered many strategic options before opting to go private in a buyout led by Chief Executive Michael Dell.

Dell shares hovered near $ 13.65, the buyout offer price.

Regeneron Pharmaceuticals Inc shares rose 2.7 percent at $ 170.35 after it said longtime drug development partner Sanofi plans to boost its stake.

Moody’s Corp was one of the strongest percentage gainers on the S&P 500, rising 4.9 percent to $ 45.49. Last week the stock plunged 22 percent after the U.S. government launched a civil lawsuit against the company. The sell-off marked the stock’s worst week since October 2008.

About 53 percent of stocks traded on the New York Stock Exchange closed lower while slightly more Nasdaq-listed stocks closed in negative territory.

(Editing by Nick Zieminski)

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Spain’s “bad bank” rebuffs three investment funds

MADRID (Reuters) – Spain‘s so-called ‘bad bank’, Sareb, has rejected overtures from investment funds Cerebrus, Fortress and Centerbridge to enter into its capital because they were asking for advantages over other shareholders, a source with knowledge of the matter said on Saturday.

“They asked for privileges when it came to buying the assets, and Sareb rejected that offer,” the source, who spoke on condition of anonymity said. “Sareb has a commitment to treat all shareholders the same.”

Sareb declined to comment. None of the three funds could be reached for comment and neither the Bank of Spain nor the Economy Minister could confirm the matter.

Spain set up the bad bank to hive off rotten real estate assets dating from a property crash from lenders’ balance sheets as a condition of receiving around 40 billion euros ($ 54 billion) of European money to bail out ailing banks.

The head of Sareb, Belen Romana, sent a letter to the three funds on Friday declining their entry into the bad bank’s capital, but leaving the door open for further talks, Expansion newspaper reported on Saturday.

The funds wanted first choice on buying portfolios of finished buildings and on supplying services to the bad bank, the paper said.

Sareb took on 37 billion euros worth of troubled real estate assets at the end of December from four nationalized banks, including Bankia

(Reporting By Sonya Dowsett; Editing by Toby Chopra)

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Firms face horsemeat ‘disaster’

8 February 2013 Last updated at 11:12 ET

By Matthew Wall Business reporter, BBC News

The latest scandal surrounding horsemeat in processed food could be “disastrous” for the meat processing industry, retail analysts are warning.

Lost contracts with supermarkets “will undoubtedly cost them millions of pounds”, Neil Saunders of retail analyst Conlumino told the BBC.

“The loss of supply contracts could be disastrous for food suppliers.”

The Food Standards Agency now wants the industry to test all its processed beef products.

The British Meat Processors Association, whose members produce 80% of meat sold in the UK, said: “It’s too early to say what the impact will be on our industry. The BMPA is co-operating with the FSA [Food Standards Agency] to establish the facts, and to deal effectively with the issues.”

One supplier, meat processor Silvercrest, based in County Monaghan, Ireland, lost supply contracts with Tesco, Aldi and Co-operative supermarkets after the Food Safety Authority of Ireland (FSAI) found horse and pig DNA in burgers it supplied.

“It wouldn’t surprise me if there were redundancies,” said Mr Saunders.

A spokesperson for ABP Food Group, which owns Silvercrest, said: “We feel it would be inappropriate to comment at this stage.”

Testing regime

In a statement issued on Friday, the FSA said: “In addition to the widespread testing we are doing, we’ve instructed the industry to urgently carry out its own tests on processed beef products to see whether horsemeat is present.”

But this new testing regime could cost the industry millions of pounds.

Giving evidence to the Environment, Food & Rural Affairs select committee on 30 January, Tim Smith, Tesco’s group technical director revealed that the supermarket’s new DNA testing regime, introduced following the discovery of horsemeat in its value burgers, would cost it “£1m to £2m a year”.

Meanwhile, Tesco’s sales loss would be “a lot bigger than a million pounds” as a result of the scandal, he said.

But Richard Dodd of the British Retail Consortium, which represents 80% of the UK retail industry, told the BBC: “What we’re hearing from our members is that this [horsemeat] issue is not having an impact. People are clear that it isn’t a health issue, so it’s not producing a change in customer shopping habits.”

And Conlumino’s Neil Saunders agrees that the supermarkets are unlikely to be affected much by the scandal, since they can claim compensation from their suppliers.

“While it is highly likely that sales will have deteriorated in some food lines, such as value burgers, other categories may have benefitted, meaning that there is little net loss overall,” he said.

Traditional High Street butchers might even be benefiting from the horsemeat scandal, says Richard Stevenson, technical manager of the National Federation of Meat and Food Traders.

“Our members are telling us that they’re all getting more business since the Tesco burger issue, because most butchers know exactly where their meat has come from. You could argue that this issue has arisen as a direct result of the cheap food policy adopted by supermarkets.”

Findus, which had to withdraw its beef lasagne ready meals after some samples were found to contain 100% horsemeat, said on Friday that it had tested all its other beef products and found no evidence of contamination.

BBC News – Business

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