E. coli fears hit the bottom line

The E. coli blame game has left some in the agricultural industry with some very real financial damage as sales dropped according to what consumers were told by government officials and the media.

On May 28, the Czech Agriculture and Food Inspection Authority (CAFIA) announced on its website that Spanish cucumbers suspected of E. coli contamination had been delivered to the Czech Republic via a German bio cucumber supplier. The office named the organic specialty store Country Life as the sole receiver of the cucumbers, a fact that was quickly disseminated in the media.

"We saw some drop in sales last week, about 30 percent," Lubomíra Chlumská, who is in charge of marketing at Country Life, told The Prague Post June 6. "We're waiting to see if this drop will continue or if it will return to normal. On the other hand, a big part of our customers have expressed their support."

In a statement from the company released June 2, Country Life Director Otakar Jiránek said he hopes the incident will create a greater demand for organic food that is grown domestically. As it stands, market demands can sometimes be at odds: Customers who want organic must often buy imported products, as domestically grown products are not always organic.

"We hope the current scandal will lead to increased consumer interest in organic food grown at home," he said. The problem is that customers want a wide variety of fruits and vegetables year round, a demand that can only be met with imports, he added.

Spain's agriculture sector lost approximately 200 million euros ($290 million/4.89 billion Kč), according to Spanish officials. Abroad, stores that carried produce under suspicion either slashed prices and posted explicit signs stating the produce was not Spanish or, in Country Life's case, fought back against allegations it carried contaminated vegetables.

Germany's Health Ministry first rang the alarm May 26 with a recommendation that consumers avoid tomatoes, cucumbers and green salads. The ministry's Hamburg-based disease control and prevention arm, the Robert Koch Institute, had found traces of EHEC in cucumbers "which were, amongst other, imported from Spain."

But on June 1, the European Commission (EC) announced the German Health Ministry had informed it that further tests had not found on the Spanish vegetables the specific strain that had caused the outbreak, and Spanish authorities had not found any presence of the strain in domestic produce, either. The EC removed an alert on Spanish cucumbers that had been sent out on the Rapid Alert System on Food and Feed.

Now, Spanish farmers who saw their produce destroyed are questioning why they were blamed in the first place, and want to seek financial reparation from the EU or Germany.

"We want compensation for the grave and irreparable damage done to Spain," Health Minister Leire Pajín said before a meeting with fellow EU health ministers in Luxembourg. "We condemn the slow response and are concerned about how this crisis has been managed from the very start."

Germany is Spain's largest buyer of produce, importing an annual 410 millions euros worth. Spain exports 630 million euros worth of produce to the United Kingdom, France and the Netherlands combined.

Two Spanish farm associations, the ASAJA and the COAG, told the Associated Press they don't have exact figures of the resulting loss, but estimate millions of euros in lost produce and transport sales. Spain's Environment, Rural and Marine Affairs Minister Rosa Aguilar Rivero said before a meeting in Budapest May 31 that the Spanish economy could reckon with a 200 million euro loss.

On a Spanish radio station, Deputy Prime Minister Alfredo Pérez Rubalcaba said Madrid would consider legal action against Germany's costly allegation.

"We do not rule out taking actions against the authorities who called into question the quality of our products," he said. "We may take action against the authorities."

Spanish Prime Minister José Luis Rodriguez Zapatero announced online June 2 that German Chancellor Angela Merkel told him she would consider compensation for the fallout, but said she believed the Hamburg authorities had acted legally.

"Merkel promised that Germany would consider formulas within the European framework to compensate affected farmers," Zapatero's statement said.

Claire Compton can be reached at
ccompton@praguepost.com