Maybe Ikea should stick to furniture
First, the Swedish mega-chain got caught in the horse meat scandal. Now, it finds out China has dumped nearly 2 tons of its tainted chocolate cake.
For the Swedish purveyor of discount, do-it-yourself furniture, those were the salad days. But after Ikea took its eyes off the non-salad items at its afterthought food counter, things started getting as shaky as a coffee table missing its locknuts.
According to Agence France-Presse, Ikea has filed suit against a Swedish meat provider after horse DNA was found in the beef used to make Ikea's sausages and beloved meatballs at its European locations. And in China, The Associated Press says health officials turned nearly two tons of Ikea chocolate cake into landfill fodder because it violated food quality standards.
In each case, Ikea's food counter has been the Allen wrench turning customers' stomachs. The chain's meat supplier, Dafgaard, says 5% to 10% of its meat came from Polish slaughterhouses that mixed horse meat into several batches of meatballs. The slaughterhouses vowed they weren't handling horse meat, but DNA analysis found trace amounts in bags of meatballs pulled from Ikea stores in 25 countries.
Although Burger King (BKW), Wal-Mart (WMT), Nestlé (NSRGY) and Yum Brands' (YUM) Taco Bell have felt Ikea's pain during the recent European horse meat scandal, Ikea is loath to let recalls and apologies serve as its only response. Compared to Ikea's woes in China, its meatball problems are just a costly case of mislabeling.
The two tons of cake that Shanghai's quarantine bureau just tossed out like a broken wall unit were laced with excessive levels of coliform bacteria. The cake, made by yet another Swedish supplier, was destroyed in November, but Ikea just learned about it on Monday.
At least the company is also keeping good company in China, where officials have been cracking down on food quality after a host of scandals. Yum's KFC lost 37% of its Chinese sales in January after health officials found it violated rules on drug use in poultry. And Nestlé had its chocolate bars pulled from shelves for containing too much sorbitol, a sweetener that when consumed in large amounts can cause bowel problems.
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The major averages were awakened from their weekend slumber with an opening retreat that pressured the S&P 500 below its 20-day moving average (1975). Even though ... More
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