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UK ad watchdog raps Tesco on horsemeat campaign

LONDON (Reuters) - Britain's advertising watchdog ruled Tesco, the nation's biggest grocer, misled consumers with a press campaign on its response to the horsemeat scandal by implying issues with meat standards existed across the whole food industry.

The ruling by the Advertising Standards Authority (ASA), which banned the ad, represents a further public relations blow to Tesco, which is attempting to revive its fortunes in its home market after losing share to rivals.

Last month Tesco was fined 300,000 pounds ($465,900) by a British court for misleading consumers over the pricing of strawberries, prompting a wave of negative publicity.

The ASA ruling relates to a two-page national press ad Tesco ran in January apologizing for selling beefburgers that contained horse meat.

Tesco's ad contained the lines: "The problem we've had with some of our meat lately is about more than burgers and bolognese. It's about some of the ways we get meat to your dinner table. It's about the whole food industry."

Retailers earlier this year removed products from sale in Britain, Germany, Austria and Norway; police raided factories in several countries and Dutch prosecutors accused a meat supplier of fraud as the horsemeat scandal erupted.

The ASA said Tesco's ad drew two complaints, including one from an independent butcher.

Tesco said it published the ad to show it was taking the horse meat issue seriously and to demonstrate it was listening to customers.

Its assertion was that the ad would have been interpreted as a reference solely to their own contamination issues.

However, the ASA upheld the complaint that the ad was misleading.

"Because the ad implied that all retailers and suppliers were likely to have sold products contaminated with horse meat, and because relatively few instances of contamination had been identified at the time the ad appeared, we concluded the ad was misleading," it said.

In June Tesco, the world's No. 3 retailer, posted a drop in quarterly underlying sales in its main British market, resuming a trend seen for most of the past three years and raising doubts about its 1 billion pounds turnaround plan.

The company has been investing heavily on more staff, new food ranges, revamped stores and lower prices.

Shares in the firm were down 1 percent at 365.8 pence at 0915 GMT.

(Reporting by James Davey; editing by Keiron Henderson)

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