Lion Capital exposed to UK’s horsemeat scandal(2)

After withdrawing its beef lasagne products on Monday, it has been confirmed that the products from Findus Group, one of Lion’s portfolio companies, contain horse meat.

Findus Group's
beef lasagne
tested positive
for horse meat

Lion Capital, a UK-based private equity firm, has been dragged into the UK’s horsemeat scandal after beef lasagne products from frozen food business Findus Group, a company in which Lion Capital holds a 33 percent stake, were found to contain horse meat. 

Findus Group withdrew its beef lasagne on Monday in the sizes 320 grams, 360 grams and 500 grams from all retailers “as a precautionary measure”, after its French supplier, Comigel, raised concerns about the type of meat used in the product. 

Last month it emerged beef products produced in an Irish factory contained horse meat. As a result of this, the UK’s Food Standard Agency (FSA), an industry watchdog, launched an investigation into mislabelled meat. 

The FSA confirmed on Thursday that Findus’ recalled beef lasagne products tested positive for more than 60 percent horse meat. The products were distributed to the main UK supermarkets, according to the FSA. 

“The investors in Findus Group are in regular communication with the company’s management team about the Comigel situation as they take this matter very seriously.  It is a matter for the company to deal with and we are confident that they are dealing with it appropriately,” Lion Capital commented in an email. 

There is no evidence to suggest that this is a food safety risk, the FSA said in a statement, but it has ordered Findus to test the lasagne for the veterinary drug phenylbutazone. “Animals treated with phenylbutazone are not allowed to enter the food chain as it may pose a risk to human health,” it said. “People who have bought any Findus beef lasagne products are advised not to eat them and return them to the shop they bought them from”, it added. 

All other Findus products have been tested and are not affected, Findus Group said. “We understand this it is a very sensitive subject for consumers and we would like to reassure you we have reacted immediately. We do not believe this to be a food safety issue. We are confident that we have fully resolved this supply chain issue. Fully compliant beef lasagne will be in stores again soon,” the firm said in a statement on its website. 

Lion Capital bought a 100 percent stake in Findus Group in July 2008 from CapVest Equity Partners. During a restructuring, this became a 33 percent stake last summer. The remaining stakes are held by JP Morgan Mezzanine, Highbridge principal strategies and Northwestern Mutual. Prior to that, the company was owned by EQT Partners.