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Photo Gallery: Germany's Animal Feed Scandal

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Inside the Dioxin Scandal The Criminal Machinations of the Feed Industry

Once again, contaminated animal feed is threatening the health of consumers. The control system is too lax, and information policy is a disaster. The most recent dioxin scare shows that the authorities have learned very little from the food safety scandals of the past.
Von SPIEGEL Staff

Belgium, the spring of 1999: Inspectors find high levels of dioxin, along with other toxins, in eggs. An oil-and-fat recycling company had supplied a feed producer with fats that contained high levels of dioxin, and the toxic substance found its way into chickens, pigs and cattle -- and eventually into the stomachs of German consumers.

The losses were in the billions. The German Health Ministry was outraged over the Belgians, and the European Union announced drastic changes.

German, the winter of 2011: Eggs remain unsold on supermarket shelves. Mothers are concerned about giving their children cow's milk to drink. The authorities shut down close to 5,000 farms and order hundreds of thousands of eggs destroyed. Some 150,000 tons of feed were contaminated with fat containing dioxin supplied by a producer in Uetersen near Hamburg.

German Consumer Protection Minister Isle Aigner says that she finds it "truly deplorable that an entire industry is affected by individual offenders." Aigner, a member of the conservative Christian Social Union (CSU) the Bavarian sister party to Chancellor Merkel's Christian Democrats, announces talks with the German states aimed at improving consumer protection in the future.

The images, the complaints and the pledges to improve conditions are all too similar.

Germany has a new food safety scandal on its hands. And once again it is being sold as an isolated case. Yet, can this really be the regrettable lapse of a single company? Insiders believe that Aigner's position is naïve. There are too many signs of deficiencies within the system.

The radical reforms in agriculture that former Consumer Protection Minister Renate Künast, a member of the Green Party, had called for with such great passion in 2001 are now long forgotten. Nowadays, the food industry is based just as much on the division of labor as any other industry. The most important factor is price. To be able to sell eggs, meat and poultry as cheaply as possible in discount supermarkets, producers are forced to cut costs, mainly in what they feed their animals.

An Industry with a Battered Repuation

Parts of the livestock feed industry are not particularly squeamish, willing to add anything to their products that promises to improve the bottom line -- and doing their best to circumvent inconvenient regulations.

Hardly anyone in Berlin wants to jeopardize the economic success of the German food industry, the country's fourth-largest sector. It now earns about a quarter of its €150 billion ($194 billion) in annual sales in other countries.

Under these circumstances, what politician is likely to enact tougher laws and tighter regulations likely to drive up prices for German producers?

The most recent food safety scandal involving dioxin-tainted fats shows how negligently the authorities treat an industry with a reputation battered by countless infractions. "Until now, we have dealt primarily with food products and not feed," admits Eberhard Haunhorst, head of the Office for Consumer Protection and Food Safety in the northern state of Lower Saxony.

Last year, Haunhorst's employees took just 2,500 random samples from 3,600 commercial feed producers. Conditions are not much better in the rest of the country, where inspectors conducted 14,557 spot checks in 2010. About the same number of drug tests were done on the relatively small number of top German athletes.

Lacking sufficient staff to conduct their own inspections, government agencies rely on self-inspection within the companies in question. Under the somewhat vague regulations, each company must ensure that the products it puts into circulation are safe. According to Haunhorst, there are no regulations specifying what exactly feed producers have to inspect. Although many companies have introduced their own quality assurance system, none of these systems are binding, and regular dioxin testing is not explicitly required.

Johannes Remmel, a member of the Green Party and the environment and consumer protection minister in the western state of North Rhine-Westphalia, is calling on his counterparts in other states to introduce legislation that would impose stricter regulation on food producers. However, traditional farming states like Lower Saxony and Bavaria are not willing to make significant changes to existing practices. They expect that their opposition will soon convince their outspoken counterpart to come to his senses.

Industry Machinations

Harles und Jentzsch, the oil-and-fat recycling company from outside Hamburg at the center of the scandal, is a prime example of what happens when producers are held to lax standards. When CEO Siegfriend Sievert was confronted with the initial dioxin results, his first reaction was to downplay the issue, which is common practice in the industry whenever unpleasant inside information reaches the public. So-called technical fats inadvertently found their way into fats used in animal feed, he said. Sievert called it a regrettable error -- nothing more than a mistake.

It is astonishing, however, that an animal feed supplier is even handling so-called technical fat, which is not intended for use in the food chain. Commenting on the technical fat issue, Siebert said that his company maintains a "parallel production for the paper industry." And when asked why this part of the business is not mentioned on the company website, he told SPIEGEL: "It's hard to say, at the moment."

Wolfgang N. has worked in the animal feed industry for more than 15 years. He knows the Uetersen company and all of the other businesses in the industry, and he is familiar with their machinations. It is by no means a coincidence, he says, that this company, with its 15 employees, is now in the media. Many smaller and mid-sized businesses resort to trickery and cover-ups, he says. The larger companies can afford to inspect the raw materials they purchase, says N., and they do so to avoid becoming embroiled in scandals that could harm their business.

But even these market leaders do not inspect every incoming shipment, says N. The tests, including the one for dioxin, are expensive, costing about €400 apiece, and take several weeks to perform. A possible way of avoiding attention, says N., is to dilute questionable fats with other materials to keep contaminants below allowable limits in the final product.

Saving Costs

Experts like N. are also critical of the fact that many fat recyclers also handle special waste. It comes as no surprise that hardly any other industry extracts as much from trash as the animal feed industry. It turns garbage into meals and degrades animals into waste disposal systems. In this system, it can easily happen that ground feathers and sawdust are used as fillers. There are no limits to the audacity of some businesses in the feed industry, which has been known to use sewage sludge in feed and to experiment with liquid manure and tannery wastewater.

Ironically, the current scandal began with a company that was supposed to be the answer to the dioxin contamination scandals at the turn of the century. Petrotec Biodiesel specializes in turning spent cooking fat into environmentally friendly fuel. The company has operated a modern refinery in Emden in northwestern Germany since 2000. As early as the 1990s the business offered a clean alternative to the previous practice of disposing of rancid residues from the food industry but adding them to animal feed.

The business got a boost in 2002 when a Europe-wide ban on adding the spent cooking fats to feed was enacted. Roger Boeing, head of Petrotec until last year, says that it was always clear that the byproducts of the refinery operation "have no business being added to feed." After all, he adds, no one could rule out contamination of the spent fats that were being provided to the feed industry. Petrotec, for its part, did not conduct testing, because traces of dioxin are irrelevant in biodiesel, says Boeing.

Companies like Petrotec source their raw materials from all over the world. As a result, shipments from the United States are sometimes processed in Germany. And because fats are moved around a lot, contamination can easily occur during transport. Industry insider Wolfgang N. claims that shipping companies try to save costs by not routinely cleaning drums and tanks between two shipments.

'This Can Only Be the Result of Criminal Efforts'

The source of the dioxin that is now ruining business for thousands of German farmers is still unclear. When experts with the Chemical and Veterinary Inspection Institute in Münster in northwestern Germany examined the samples, they were astonished. "We have never seen this particular pattern," says Axel Preuss, director of the institute. According to Preuss, it is highly unlikely that the toxin was produced during processing at Petrotec. Now the state of North Rhine-Westphalia plans to commission a study to determine where the dioxin came from.

It is possible that the mystery will never be solved. Nevertheless, politicians are now debating publicly over changes that they say are urgently needed, although some completely underestimated the scope of the food contamination scandal at first. Several ministries in the affected German states knew before Christmas that a new dioxin scandal was brewing. Even the Federal Agriculture Ministry was in the loop, and yet the information was kept under wraps. The relevant EU agency was also not informed at first.

On the day before New Year's Eve, David McAllister, the governor of the state of Lower Saxony and a member of the conservative Christian Democratic Union (CDU), was sitting in the makeup room in a television studio at German broadcaster NDR, preparing for the recording of his New Year's address, when he received a call from Düsseldorf. It was North Rhine-Westphalia Environment Minister Remmel who, reacting to dioxin discoveries, wanted McAllister to provide him with the complete supplier lists of suspicious feed producers in Lower Saxony.

Remmel had already spent days trying to obtain important information from officials in Hanover, the capital of Lower Saxony. But it wasn't until he had called McAllister that something was done about his request. Seven days after the first dioxin report, the supplier lists were finally received in North Rhine-Westphalia.

The avalanche was not triggered by government inspection agencies or Uetersen fat recycler Harles und Jentzsch, but by a customer who had reported the dioxin discovery. An inspection laboratory at Wulfa-Mast, an animal feed producer, had found significantly elevated dioxin levels in two batches of its feed for laying hens, according to the Agricultural Ministry in Hanover. On Dec. 23, the state of Lower Saxony closed chicken farms to which the feed had been delivered.

A Profitable Undertaking

Inspectors then traveled to a Harles und Jentzsch warehouse in Bösel, a town in Lower Saxony, where the workers had a simple explanation for the problem. They said that technical fats were also stored on the grounds, and that a valve on tank 11 had probably been incorrectly operated during a mixing procedure on Nov. 11. It was human error, the workers maintained, and as a result the technical fat had been inadvertently mixed with the fat designated for use in animal feed. The contaminated fat was apparently supplied to six other feed producers, as well.

The authorities should have intervened then. However, the authorities calculated that the percentage of fat in the feed batches was so small that despite the dioxin content, the legal thresholds had apparently not been reached.

When the Lower Saxony inspectors paid another visit to the Bösel warehouse on Dec. 29, they discovered unsuitable technical fatty acids in other tanks of fats intended for use in animal feed. The same problem was discovered at company headquarters in Uetersen, were four tanks were filled with contaminated fat. This time, however, the problem could no longer be blamed on human error.

"This can only be the result of criminal efforts," says Hans-Michael Goldmann, a member of the pro-business Free Democratic Party (FDP) and chairman of the consumer protection committee in the German parliament, the Bundestag. "And I had thought that the days of waste being added to feed were long gone." It was apparently a profitable undertaking, because technical fats are about a third cheaper than feed fats.

The German Animal Food Association boasts that the case was discovered through "self-inspections and safety measures," saying that this is proof that the system does work, after all.

But not entirely. Harles und Jentzsch inspected its fatty acids three times last year. In each of these self-inspections, dioxin levels were found to be substantial higher than the allowable maximum of 0.75 nanograms per kilo. Specifically, the tests revealed dioxin levels of 1.60 ng per kilo on March 19, 1.40 on June 21 and 1.44 on Oct. 7. But in none of these cases did the company inform the authorities, nor did it ever notify customers or recall its products.

When government inspectors paid a visit to Harles und Jentzsch on July 28, they were apparently not shown these test results. When they tested their own samples for dioxin, the results were supposedly negative. The inspectors were not even suspicious when they saw delivery notes indicating that the purchased fatty acids were not suitable for animal feed. By way of explanation, company officials now say that fats were also sold to the paper industry.

'Risk-Orientated' Inspections

The authorities apparently had confidence in the company. Because of staffing reductions, the inspectors in the northern state of Schleswig-Holstein were working on a "risk-oriented" basis, meaning that conspicuous companies are inspected more often than inconspicuous ones. As a result, Harles und Jentzsch could expect only one inspection a year, even though the company supplies almost all the mixed feed plants in northern Germany. After the July visit, knowing that next inspection was unlikely to occur for a while, the company felt confident that it continue to adulterate fats without fear of detection.

The fact that the scandal has had relatively little effect on the health of consumers to date can be attributed to the properties of dioxin. Although the substance is considered highly toxic, the contaminated eggs and meat do not pose a specific danger. "The detected concentrations are so low," says Helmut Schafft, in charge of animal feed issues at the Federal Institute for Risk Assessment in Berlin, "that a problem can only arise in the case of regular consumption over an extended period of time."

The EU limit of 3 picograms of dioxin per gram of fat in an egg was only exceeded in a few cases, and even this threshold is disputed among experts. The World Health Organization (WHO), for example, considers it to be "tolerable" for a person to ingest four picograms of dioxin per kilogram of body weight a day.

Accordingly, a person weighing 75 kilograms (165 lbs.) could easily handle a daily dose of 300 picograms, which would be plenty of the dioxin-contaminated eggs but only a few meals of fish like eel or salmon, which often contain relatively large amounts of dioxin. "Dioxins are everywhere," says scientist Schafft, "and every person automatically ingests tiny amounts of it every day."

More Transparency Required

Strictly speaking, even organic eggs, which are becoming increasingly popular, are counterproductive if the chickens scratch around on contaminated soil. "Eggs from the chickens that run around behind grandma's house and scratch around in the trash already have five picograms," concedes Rudolf Joost-Meyer zu Bakum, chairman of the Society for Ecological Animal Nutrition. And the most natural of all foods, which is especially healthy, would have to be banned if the WHO dioxin standards were used as the sole benchmark: The dioxin levels in breast milk are several times higher than the WHO limits.

To make matters worse, the authorities make it hard for consumers to determine how much risk they are being exposed to. The names of companies and the codes on their eggs ought to be "revealed immediately," says Günther Hörmann, head of the Hamburg-based consumer protection agency. This is taken for granted in Scandinavia, says Hörmann, and it's also possible under German law.

"But this is where nervous officials get bogged down consulting with their legal departments," Hörmann complains. It's been three weeks since the scandal became public, and yet the eggs codes of only 10 affected operations have been published to date.

ANDREA BRANDT, MICHAEL FRÖHLINGSDORF, NILS KLAWITTER, JULIA KOCH, MICHAEL LOECKX, UDO LUDWIG

Translated from the German by Christopher Sultan
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