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Nassim covers the accounting and tax rounds for BRW, as well as general business news. She previously worked for The Age newspaper covering general news, state politics and economics.

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No horsing around with Australian meatballs, says IKEA

Published 26 February 2013 12:16, Updated 26 February 2013 13:23

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No horsing around with Australian meatballs, says IKEA

Ikea says despite being classic Swedish fare, in Australia it’s meatballs use locally sourced meat and remain unaffected by the horse-meat scandal that has engulfed the brand in Europe. Photo: Fairfax Media

For $8.95 Australians can get a decent-sized plate of meatballs at IKEA furniture stores across Australia.

But will news that the world’s largest furniture retailer has withdrawn its own-label meatballs from sale in at least 16 European countries after Czech authorities found horse meat in the product dent Australian consumers’ appetite for its Kottbullar Swedish meatballs?

The company says Australia isn’t affected. “The meatballs in question are manufactured by one supplier in Sweden and only [the issue] affects some countries in Europe,” the company said in a statement. “Australian meatball suppliers are in no way involved.”

The majority of IKEA’s meatballs are made by Sweden’s Familjen Dafgard, which has now withdrawn 1 kilo bags of frozen meatballs from several countries across Europe.

The meatballs have become a trademark for the company, which sells the product packaged as part of its Swedish-style groceries range as well as in its in-store cafeterias. Served with gravy cream sauce and lingonberry jam, they are one of the hot menu items which consumers can grab from the IKEA cafeteria for under $10.

But the company says “the meatballs sold here in Australia are 100 per cent Australian meat, and therefore IKEA stores throughout Australia are not affected and will continue to sell meatballs”.

The company says the trust of customers “is of utmost importance”, but the other issue, besides IKEA’s global reputation, is whether its $1 billion food-business profits are damaged by the incident.

In January, the company reported an 8 per cent rise in full-year net profit to €3.2 billion ($4.08 billion). Revenue rose 9.5 per cent to €27 billion, with Europe making up 70 per cent of sales, North America accounting for 16 per cent and Russia, Asia and Australia contributing the remaining 14 per cent.

IKEA now has more than 280 stores in almost 30 countries worldwide and a global workforce of 139,000.

The meatballs incident follows earlier scandals revealing that horse DNA was detected in beef burgers in Britain and Ireland, sparking a Europe-wide frenzy that led to packaged frozen meat sold across the continent being investigated and tens of millions of products withdrawn.

Findus was one of the food manufacturers forced to recall thousands of packages of frozen beef lasagne in Sweden after discovering the products contained 60 per cent to 100 per cent horse meat. Just last week Czech food inspectors ordered the Tesco chain to withdraw frozen beef lasagne containing horse meat.

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