After a veterinary scandal involving the Russian arm of the French retailer, Auchan, the company has announced it is investing US$40 million to build a meat processing plant in Tambov Oblast to ensure the quality of its meat. Construction of the plant is scheduled to begin in September of this year, and the facility is expected to go online by the fourth quarter of 2016.

 

The company is currently actively conducting veterinary audits on local farms, and securing five-year contracts with farmers in the Tambov, and possibly Lipetsk and Voronezh Oblasts to supply the plant, which will have a capacity to process 23,000 tons of beef, 15,000 tons of pork, and 2,000 tons of mutton per year. Under the terms of the supply contracts, Auchan will finance the final fattening of the animals within the last 100 days before delivery, when the animals are required to be fed a concentrated grain mix designed to improve the quality of the meat.

 

The decision to build the plant follows a quality scandal where Russia’s veterinary regulatory body, Rosselkhoznadzor, found listeria and E. coli in 37 samples of meat from the retailer’s stores, and found packages of pork for sale that contained horse, beef, and poultry DNA, while other packages of meat had manipulated shelf-life labels.

 

The fallout of this scandal may be felt across the whole industry as Moscow is considering a bill banning retailers from manufacturing their own meat products, instead giving third party producers and processors the ability to manufacture meat products under the retailer’s brand name.

 

Aside from this measure, Russia’s Parliament is also considering tightening existing legislation regarding meat fraud and quality control violations which impose fines for a first offense and a temporary retail stoppage for a second violation.