Impact and status of HACCP in the Australian meat industry

Abstract

A number of food safety systems have been implemented in Australia but information regarding the motivators, constraints, costs and benefits of Hazard Analysis and Critical Control Point (HACCP) as a food safety programme, as well as novel verification methods in the meat industry, has been lacking. Semi-structured reviews were used as part of an industry-level study of 50 per cent of businesses. Results show that the benefits of food safety systems incorporating HACCP within the meat industry in Australia have been widespread and significant. In particular, Australian firms reported a reduction in rejects/rework/out of specification products, reduction in customer complaints, improved product hygiene, improved morale and an increase in overseas markets. However, this has been at the cost of refurbishment for small businesses, training and the exiting of firms that have not complied/been able to comply with the HACCP requirements. Most of the costs involved with HACCP could not be recouped in the short-term. Also, the unwillingness of small firms to participate in the research had repercussions on the outcome. This article helps to define the HACCP system and will be of interest to those involved in the implementation of it.

Introduction

Hazard Analysis and Critical Control Point (HACCP) is a safety and quality management tool, developed by the Pillsbury Corporation in the 1960s ([3] Bennet and Steed, 1999). In conjunction with the National Aeronautics and Space Administration, the system was used as a means of ensuring food safety for astronauts' food. From the 1980s onwards, HACCP based systems were gradually adopted in the food industry ([9] Guzewich, 1985). In a review of the worldwide approach to the use of HACCP as a food safety control measure, [17] Ropkins and Beck (2000) reported the adoption and implementation of HACCP in Australia as being much more rapid and industry driven than in other countries. The same authors also commented that the Australian food industry approach to food safety was the most practical and readily applicable to HACCP.

By 1984, most of the Australian dairy industry had instituted HACCP orientated process control procedures ([14] Peters, 1998). At about the same time, the Australian Quarantine Inspection Service (AQIS) was also involved in implementing HACCP procedures in the production of foods for export. Problems arose due to interpretation difficulties and inconsistencies in the numerous food safety schemes for export and local markets. It was not until 1996 that the Australia and New Zealand Food Authority ([6] ANZFA, 2001) endorsed the Codex Alimentarius Commission guidelines and this allowed HACCP standardisation to take effect.

In the meat sector, the legislation for domestic processing does not specifically mention HACCP. However, all meat works are required to have a food safety system that utilises HACCP based principles. The introduction of descriptive regulations, as stated in the [11] Meat Industry Act (1993) and [7] The Food Production (Safety) Regulation (2000, [8] 2002) allowed firms to develop their own food safety programmes. Different approaches can be seen for export ([12] MSQA, 1994) and domestic facilities, for example, in their prerequisite procedures and validation requirements.

In 1995, Woolworths, a major and dominant food retail business, instituted the Woolworths Vendor Quality Management Standard (WVQMS). Woolworths thus demonstrated leadership in the food safety area and other majors followed suit in a short space of time. Under WVQMS all vendors intent on using Woolworths as a retail outlet for any product, were expected to comply fully with this Standard. Successful completion of a WVQMS certification audit qualified the firm as a trading partner. The WVQMS required: pre-requisites procedures - cleaning operations, good manufacturing practice (GMP), training (hygiene awareness), recall procedure, pest control procedures, factory inspection prior to commencement of operations; and the development of a HACCP plan following a 12-step process:

form and describe HACCP team;

define scope of HACCP study;

describe product and intended use;

prepare flow chart;

conduct hazard analysis;

determine the critical control points (CCP);

establish critical limits;

establish a system to monitor the CCP;

establish corrective action;

establish procedures for verification;

establish documentation; and

establish procedures for reviewing HACCP plans.

Whilst most firms used the above process to fulfil the requirements for the domestic market, only minor additional changes were required for the export market. In addition, the advent of HACCP-9000 ([13] NFSI, 1997) represented the integration of ISO 9000 and HACCP into one management system to assure food safety and quality recognisable world-wide. Cross-references between the ISO 9001 standard and HACCP were possible ([13] NFSI, 1997) allowing closer management of an array of issues. For example, customer complaints could be used as a means of determining the effectiveness of HACCP since the review process allowed the HACCP team to re-assess the risks and severity in problem areas and to make the appropriate changes immediately on line or as required. Auditors would specifically target customer complaints and non-conforming product (ISO 9001:1994 element 4.1) as a feedback mechanism to ensure that these issues were addressed. Endpoint testing was required by a number of firms to ensure compliance to particular specifications. [2] Aruoma (2006) concludes that HACCP is a major contributor to the overall quality assurance system (ISO 9000) and in international food trade. Today, the above WVQMS requirements are an intrinsic part of ISO 22000:2005.

Although HACCP based programmes are now in place in the Australian meat industry, little information exists regarding the benefits, constraints, costs or novel verification methods employed. [20] Yapp and Fairman (2006) recently identified the barriers affecting food safety compliance as time and money with underlying issues preventing compliance such as lack of trust in food safety legislation and enforcement officers, a lack of motivation in dealing with food safety legislation and a lack of knowledge and understanding within small and medium-sized enterprises (SME). A literature review by [5] Cao et al. (2004) regarding the economic aspects of HACCP focuses on impact issues associated with HACCP implementation. Most of the economic evaluations of HACCP have emanated from the USA ([10] Jensen and Unnevehr, 2000; [16] Roberts et al. , 1996). The regulatory impact assessment report by the [8] US Food Safety and Inspection Services (2001) provides a preliminary indication of industry-wide cost and benefits. A report by the [1] Allen Consulting Group (2002) in Australia shows the annual one-off aggregate development cost in ten industry categories to be in the order of AUS$192.2 million or AUS$1,440 per business; aggregate ongoing costs in the order of AUS$235.5 million or AUS$1,700 per business per annum and additional costs to government in the order of AUS$10 million for ten years.

In the [1] Allen Consulting Group (2002) study, the main benefits to the Australian food industry could not be precisely quantified but they centred around two main issues - the extent of any decrease in foodborne illnesses attributable to food safety programmes and the extent of the current incidence of foodborne illness and their associated costs. An approximate assessment of the benefits of HACCP adoption to the food industry ([1] Allen Consulting Group, 2002) is AUS$339 million (confidence interval AUS$206 to 492 million). Other benefits were difficult to quantify. These were identified as improved food quality, reduced waste, better staff morale and awareness and improved routine. Data for individual industries that would allow for quantification of benefits does not exist.

This study attempts to qualify and quantify HACCP based improvements in hygiene and food safety in the meat industry from a managerial perspective. Its objectives are:

- to determine the motivators and constraints for HACCP implementation;

- to ascertain the costs and benefits of HACCP implementation; and

- to examine any novel verification methods being employed.

Method

Sample size and nature

A sampling frame was developed to accommodate:

- the range of relevant meat species, including beef, sheep, chicken, pork and goat;

- the types of firms in the meat chain from abattoir to meat manufacturer; and

- a range of sizes of firms in the meat processing chain.

Interactions among meat species, firm type and firm size produced a sampling frame matrix. Within each cell of the matrix, key firms were identified from prior knowledge of the industry and information provided by Meat and Livestock Australia. A total of 42 firms that could potentially be sampled, was identified.

Data collection

A semi-structured interview format was judged most appropriate and most likely to produce the depth of insight that would be required to meet research objectives. The target for each interview would be the manager in the firm who was responsible for quality management, including food safety.

An interview guide was developed for pilot testing. A total of nine interviews across a range of firms constituted the pilot sample. Four additional firms participated in the study. Overall, while only 13 firms participated in this study, they collectively represented approximately 80 per cent of national meat processing throughput. It should be pointed out that initially 42 survey questionnaires were posted to firms from the sampling frame but we received no response even after three months. Furthermore, a follow up by telephone call was to no avail. Therefore, most interviews were conducted face-to-face; some later interviews were conducted over the telephone. Only minor amendments to the instrument were necessary following the nine pilot interviews.

The interview instrument

The interview instrument was divided into four sections. Section 1 dealt with the possible motivations for firms to become involved in implementing HACCP based systems. Section 2 addressed constraints to implementing HACCP. Section 3 dealt with costs and benefits of using HACCP based systems and section 4 examined any novel verification procedures that firms might have used or considered using. Within each of the first three sections, a range of possible answers to the main question was identified so that they could be used as prompts during the interview. Section 4 was addressed in an open-ended way. Details of the contents of each section of the instrument follow:

Section 1 - Possible motivating factors in the implementation of HACCP

- 1.1 Regulatory requirements;

- 1.2 To enhance the firm's reputation;

- 1.3 To reduce costs;

- 1.4 Because customers required it;

- 1.5 Because of past experiences with food safety issues;

- 1.6 Because trained staff were available;

- 1.7 Because HACCP training was available;

- 1.8 Because it was a management decision.

Section 2 - Possible constraints to adopting HACCP

- 2.1 Capital costs;

- 2.2 Costs of developing the system;

- 2.3 Costs of training;

- 2.4 Costs of implementation;

- 2.5 Lack of awareness of HACCP;

- 2.6 No perceived benefits;

- 2.7 Risk assessment schemes;

- 2.8 The regulators themselves.

Section 3 - Possible costs and benefits of HACCP implementation

- 3.1 Costs;

- 3.1.1 One-off costs;

- 3.1.2 Operating costs;

- 3.1.3 Increased costs to the supply chain;

- 3.2 Benefits;

- 3.2.1 Increase in sales;

- 3.2.2 Less rejects/product out of specification/reworked product;

- 3.2.3 Reduction in customer complaints;

- 3.2.4 Reduction in operating costs;

- 3.2.5 Increase in customers or markets;

- 3.2.6 Increased benefits to the supply chain;

- 3.2.7 Improved morale.

Section 4 - Novel verification procedures

- 4.1 Methods employed;

- 4.2 Other issues.

Note: the question of costs was asked in different ways to obtain multiple perspectives on this issue, as costs were seen as a major factor.

Results

Table I [Figure omitted. See Article Image.] shows the number of meat plants by size and species processed. Firm size is an indication only and is used as a guide by the respective sources of the data for administrative purposes only. Interactions among species, type of firm and firm size existed within the matrix. Tables II [Figure omitted. See Article Image.] and Table III [Figure omitted. See Article Image.] identify the abattoirs and meat processing facilities sampled respectively.

Section 1. Possible motivations to adopt HACCP

1.1 It was a regulatory requirement

All firms began HACCP to comply with regulations except one, which had started in 1993 because it had already seen HACCP as an avenue towards safe food. The time for implementation varied between 6-12 months.

1.2 To enhance the firm's reputation

This was not an issue at that time. However, respondents reported that today a firm cannot conduct business without an effective HACCP system. A toal of three respondents said that HACCP protects them from legal liability by practising due diligence. Two firms stated that the HACCP stamp on their packaging provided them with a distinguishing feature that differentiated them from competitors when HACCP was first enforced.

1.3 It reduced costs

Only one firm reported immediate savings, by enabling it to do away with a full time AQIS inspector who was costing them about AUS$200,000 per year. All other firms reported no reduction in costs. Some suggested that too much was being asked of them, the system was an "overkill" and was at times impractical.

1.4 Customers required them to adopt HACCP

This was seen as the 'true motivator' because customers such as supermarkets required HACCP based systems, such as the Woolworths Vendor Quality Management System, SQF2000 and ISO9001. Export abattoirs and processors needed it to survive and they adopted HACCP more quickly than domestic operators. The system has now evolved to the point where customers are demanding further testing, sometimes based on US or European experiences (e.g. testing for BSE).

1.5 Due to past experiences with food safety issues

All firms definitely agreed that past experiences were of concern. They reported examples such as customer complaints, poor traceability, rework of product in-house, and a general lack of awareness of hygiene on the part of the workforce. However, 12 firms stated that this was not a motivator.

1.6 Due to the availability of QA staff

This was not a motivator. Plenty of trained staff was available at the time, but this did not motivate firms to adopt HACCP.

1.7 Due to the availability of HACCP training

Generally, staff with prior training was preferred when employing new staff. This was not a motivator.

1.8 Management wanted to implement HACCP

All respondents reported management to be supportive of HACCP implementation in their firms. Most expressed the view that management's attitude was to do "whatever had to be done" because this was seen as necessary to stay in business, or to retain export licenses or retain markets. Subsequently, product liability issues scared some managers into taking HACCP very seriously (see 1.2).

Section 2. Possible constraints to adopting HACCP

2.1 Capital costs of HACCP systems

There was a varied response to this issue. Larger firms already had export licenses and good quality facilities in place. Smaller firms (two) reported having to upgrade refrigeration, install footbaths, hand washing facilities and partition off raw material handling from cooked product areas of the plant.

2.2 Costs of developing the HACCP system

Exact figures could not be determined as it was so long since HACCP was implemented and some respondents were not with the firm at that time. One small firm had hired a consultant to develop the system for AUS$4,000 to 6,000.

2.3 Costs of training

For all respondent firms, training involved an awareness programme for all employees (1-2 hours); a leading hands training course (one day); internal auditor training (on-going) and HACCP training for QA staff (two days). Everyone needed training, even employees in some firms who had university degrees. Costs varied from AUS$2,500 every three months over a 12-month period to AUS$15,000 depending on firm size, number of personnel, number of products and number of shifts involved.

2.4 Costs of implementation

Respondents were unsure of these costs. One of the largest firms (85 employees, with an annual turnover AUS$40 million) estimated the annual cost of implementation to be AUS$100,000.

2.5 Lack of awareness

Some respondents (three) wondered why HACCP was necessary. It seemed too much at that time and was regarded as another imposition by regulators.

2.6 No perceived benefits

For those firms that were unaware of HACCP at the time, benefits were unclear. For the remaining five firms, there were definite perceived benefits, particularly from a food safety perspective.

2.7 Risk assessment schemes

Risk assessment schemes were part of the HACCP requirement but there was no universal standard. Auditors interpreted information differently/inconsistently and some were much tougher than others. Some firms employed a low-, medium- and high-risk assessment while others used a number scale with no correlation between the two processes. Subsequently, [18] Souness (2000) and [15] Peters (1999) highlighted that accreditation of auditors and their legal liability was a major issue that needed to be resolved. One large firm claimed that it was audited up to 30 times in a year, while others reported being audited just a few times with differing viewpoints on risk.

2.8 Regulators themselves

Regulators were regarded as a constraint in the beginning because it seemed that they too were learning.

Section 3. Possible costs and benefits of HACCP implementation

3.1 Costs

3.1.1 One-off costs . This was not really seen as an issue. One firm now invests about 5 per cent of turnover annually on HACCP related upgrades. Other firms only considered HACCP related capital investments when refurbishing or expanding. Three out of 13 respondents were currently expanding.

3.1.2 Operating costs . The costs of employing new individuals as HACCP (QA) trained staff, was quite problematic since they may not necessarily have had the exposure on particular product lines. Furthermore, salary costs needed to be considered because of staffing different shifts. Audit costs varied widely depending on whether they were internal, second party or third party. The number of audits ranged from two per year for a small firm to 30 per year for a leading meat processor. A consistent approach by auditing bodies is required to produce greater confidence and to reduce the number of annual audits. Microbial, chemical and foreign object verification costs were reported to have escalated, for most firms by at least threefold. Training was an on-going cost.

3.1.3 Increased costs to the supply chain . All firms reported being unable to pass HACCP costs on to their customers, and so had to absorb them as part of overheads. This was seen as an important issue in an extremely competitive industry with low margins.

3.2 Benefits

3.2.1 Increase in sales . This was seen as not specifically attributable to HACCP but as a consequence of it. For firms without their own brand, domestic sales increases were probably the result of growth in the fast food sector.

3.2.2 Less rejects/out of specification/reworked product . Respondents reported an average saving of 5-12 per cent of total production volume depending on the product, the firm and the individuals within the firm. Two firms could not attribute savings directly to HACCP as they also had TQM, MSQA and ISO 9000 systems in place.

3.2.3 Reduction in customer complaints . All firms reported a reduction in complaints but could not quantify them.

3.2.4 Reduction in operating costs . A reduction in operating costs was dependant on the firm. A total of two firms reported around 3 per cent reduction in total costs; another reported a 100 per cent increase in the cost of their QA system post-HACCP. All required increased levels of microbial and water testing which increased some costs.

3.2.5 Increase in customers or markets . The number of firms in the meat industry is declining. Reasons behind this exit may be increased competition, regulatory issues (including HACCP), disease, dwindling profits, takeovers etc. This has left a gap that is rapidly penetrated by organisations that can fulfil the market requirements. The increase in domestic markets could not be directly attributed to HACCP. Exports have increased to the Caribbean and Japanese markets primarily due to BSE cases abroad.

3.2.6 Increased benefits to the supply chain . Only one firm reported that there had been some favourable responses from supply chain partners in Indonesia, the Middle East and Japan because HACCP had benefited their downstream partners. Half the respondents have received no feedback from their chain members.

3.2.7 Improved morale . The response was categorically affirmative because the employees now understood and appreciated what they were doing and this gave firms more confidence in their product.

Section 4. Novel verification methods

4.1 Challenge testing

Staphylococcus, Listeria and E. coli were the main organisms involved here. Recovery methods varied between countries and recognition of results became an issue as some international customers refused to accept some of the methods employed. In the case of E. coli , one firm reported that Klebsiella was also enumerated, providing inaccurate counts. This same firm has embarked on using mathematical modelling of cooking processes to predict safety. Such processes require validation in order to claim equivalence as predictable models. Another issue that surfaced regarding E.coli with reference to O157:H7, was that the generic E. coli test cannot predict when E.coli O157:H7 may be present and that a novel, rapid method of detection would be beneficial to the industry. These sentiments are also raised by [19] Todd (2003) who questions the limits of detection set for a number of other organisms.

4.2 Other issues

One of the companies in this study retains a frozen tissue sample from every carcase processed. In the event of a need to trace a foodborne disease outbreak, testing (e.g. DNA) would allow matching of the suspect material with a retained sample from a particular carcase.

Discussion

There was a general lack of awareness of the Codex Alimentarius Commission HACCP ([4] CAC, 1969) system amongst most of the firms interviewed. [20] Yapp and Fairman (2006) found that 62 per cent of proprietors in UK based food SMEs demonstrated a lack of knowledge throughout the compliance decision process with regard to food safety legislation and environmental regulation. The specific design and implementation of HACCP as directed in Codex has been shrouded by other quality systems in Australia. Elements within ISO 9001:1994 and the WVQMS have been incorporated and adapted into food safety schemes allowing firms to leverage on the different quality schema. HACCP does not specifically require microbiological testing or traceability, however, verification in this case has been used to justify microbiological quality (pre-release and customer based requirements) while traceability has allowed firms to investigate the nature/source of customer complaints. It is interesting to note that the 12-step process can be cross referenced with clauses within ISO 22000:2005. Thus, firms in Australia have actually been practising elements seven (planning and realization of safe products) and eight (validation, verification and improvement of the food safety management system) in the ISO 22000 standard since 1995 (i.e. for almost ten years).

The most effective food safety systems are established, operated and updated within the framework of a structured management system and incorporated into the overall management activities of the organisation. This provides maximum benefit for the organisation and interested parties. ISO 22000:2005 has been aligned with ISO 9001 in order to enhance the compatibility of the two standards. HACCP-9000 and the WVQMS have played an important role in the development and bringing to fruition of ISO 22000:2005.

Risk assessment varied amongst firms. The severity and likelihood of occurrence of hazards followed different schema producing variable assessments. Classifications of severity and likelihood of occurrence were sometimes too broad. Auditors often questioning these schemes were found to be strict in certain instances while in others they were reported as skimming through the ratings.

At first it appears that HACCP has been confused in a myriad of operational issues but infact it has been incorporated into larger/broader quality management systems. The world class safety performance record of the Australian meat industry is testament to its ability to integrate food safety and quality management practices into everyday operations. The sample of firms in this study account for 80 per cent of meat throughput, thus, their responses must be taken as representative of how the practice of ISO 22000 has created global leadership for the Australian meat industry. Finally, it is important to acknowledge that a limitation of this study was the unwillingness of small firms to participate. Although the 13 firms surveyed account for most of the throughput, and presumably most of the excellent safety record of the industry, further research needs to be carried out to examine food safety issues amongst the large number of small firms that make up the remainder of the industry.

Conclusion

The benefits to the meat industry in Australia from HACCP as incorporated in part to ISO 22000 have been widespread and significant. In particular, Australian firms reported a reduction in rejects/rework/out of specification products, reduction in customer complaints, improved product hygiene, improved morale and an increase in overseas markets. However, this has been at the cost of refurbishment for small businesses, training and the exiting of firms that have not complied/been able to comply with the HACCP requirements. Most of the costs involved with HACCP could not be recouped in the short term. Novel methods will require validation in order to claim equivalence over standard methods.

The measurement of public health outcomes from changes in food hygiene regulations remains a daunting task for governments as these benefits can only be measured in the long term. Most of the HACCP systems in Australia have not adapted the principles to incorporate specific risks from viruses. This in itself will be a formidable task in the future for scientists and managers in the food industry.

The authors are grateful to the Food Standards Agency (UK) for funding this project and to all the firms that participated in this survey. They are also grateful to the reviewers for their invaluable comments.

References

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Appendix

Corresponding author

Yunus Khatri can be contacted at: [email protected]

  

Illustration

Table I: Classification of meat plants in Australia

  

Table II: Abattoirs sampled based on species and firm size

  

Table III: Meat processing facilities sampled based on species and firm size