case analysis for Business Ethics class

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Case #1

The Synthetic Beef Decision

The Beefman Steakhouse Restaurant (BSR) was established shortly after the Oklahoma Land

Rush of 1889. Its founders insisted on serving only the best steaks by raising and slaughtering

their own cattle; however, the founders had no systematic way of grading their beef to ensure

the best quality on a consistent basis. In 1923, the United States Department of Agriculture

(USDA) began grading beef. Although there are eight levels of USDA graded beef, there are

generally only three USDA grades of beef that a person would buy in a supermarket, a butcher

shop, or a restaurant: Prime, Choice, or Select. Of all the beef produced in the U.S., less than

2% is certified as USDA Prime. Anyone that has savored a USDA prime graded steak knows

that it is delightfully tender and juicy with a buttery flavor that makes it distinctively superior to

any other steak. Unfortunately for the BSR, most of its homegrown beef did not grade out as

prime. Consequently, the BSR began purchasing USDA prime beef on the open market in 1924

from various local vendors, a practice that continues today.

In addition to grading the quality of beef, the federal government also inspects beef. The

Federal Meat Inspection Act’s (FMIA) two main purposes are to prevent adulterated or

misbranded meat and meat products from being sold as food and to ensure that meat and meat

products are slaughtered and processed under sanitary conditions. These requirements also

apply to imported meat products, which must be inspected under equivalent foreign standards.

USDA inspection of poultry was added by the Poultry Products Inspection Act (PPIA). The

Food, Drug, and Cosmetic Act (FDCA) authorizes the Food and Drug Administration (FDA) to

provide inspection services for all livestock and poultry species not listed in the FMIA or PPIA,

including venison and buffalo.

Recent events, however, have called into question the effectiveness of government inspections

of meat. Three months ago, Michael Jones and his family ate dinner at a Burgers Galore

restaurant in Tacoma, Washington, where Michael enjoyed his “Kid’s Meal.” (Instructor’s

Note: Assume Burgers Galore is a large, multinational restaurant similar to McDonald’s.) The

next day, Michael was admitted to Children’s Hospital and Medical Center in Seattle with

severe stomach cramps and bloody diarrhea. Several days later, Michael died of kidney and

heart failure. At the same time, 300 other people in Idaho, Nevada, and Washington who had

eaten at Burgers Galore restaurants were poisoned with E. Coli bacteria, the cause of Michael’s

death. By the end of the outbreak, more than 600 people nationwide were affected. After a

month investigation, it was determined that the E. Coli tainted meat came from one packing

plant in Washington where the meat had not been inspected before shipment.

Examples of illness rooted in unsafe meat are not isolated incidents. Bad or undercooked meat

causes an estimated 4,000 deaths and 5 million illnesses annually, according to the federal

government’s Centers for Disease Control (CDC). Advocacy groups place part of the blame on

insufficient federal government inspectors and part of the blame on consumers themselves. For

example, the USDA recommends the minimum temperature of steak to be 145°F to kill off any

bacteria such as E. Coli. Cooking steak to this temperature is classified by chefs as “medium”

and by many gourmets as overcooked. “Medium rare,” 130° – 135°F, is the temperature range

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at which steaks are at their most tender, juicy, and flavorful, but this temperature is insufficient

to kill most meat-borne bacteria.

As owner of BSR, you were recently approached by a biotech firm that has successfully

synthesized beef in the laboratory that is indistinguishable from “regular” beef. You have seen

the biotech firm’s “taste tests” where people have been asked to eat a portion of laboratory

produced beef and a portion of regular beef and have asked these test subjects if there were any

differences between the two portions. All of the results have shown that people cannot tell the

difference. In addition, the laboratory beef has 50% less fat and 50% fewer calories per ounce

than regular beef. It can be cooked to each customer’s preference — rare, medium-rare,

medium, medium-well, and well done – just like regular beef but without the danger of harmful

bacteria such as E. coli. Presently, it costs approximately 15% more per pound than regular

beef, but prices are expected to decline over the next five years as production of the synthetic

beef becomes mass-produced. Since this is breaking ground technology, there are no federal or

state laws governing the inspection or consumption of synthesized beef.

Additional benefits of synthesized beef include the following: (1) the same amount of synthetic

beef can be produced on 1% of the land it presently takes to produce regular beef; (2) it is

estimated that livestock may be responsible for 15% of greenhouse gas emissions whereas lab-

grown meat would reduce these emissions by up to 96%; (3) lab-grown meat could be viewed

as animal-welfare friendly since no animals are harmed in its production; and (4) the

elimination of slaughterhouses could reduce the risk of food-borne illnesses as well as diseases

transmitted between live animals and humans.

However, if synthetically produced meat were ever to become more appealing (either by

matching animal-grown meat in terms of quality or undercutting it in terms of price), much of

the agriculture surrounding meat may be threatened. Ranchers and farmers may lose important

sources of income. Food policy reform advocates say that modern society is already unfamiliar

with the sources of its nourishment and synthetically produced meat would exacerbate that

problem. Millennia of eating animal-grown meat has shown meat to be (largely) safe for human

consumption. No such data exists on meat grown in nutrient baths. Since synthetic meat could

also be genetically engineered to bring out desirable traits, some detractors claim it will suffer

from the same criticisms leveled at other genetically modified foods.

As owner of BSR, you now must decide if you would add synthesized beef to your restaurant’s

menu and, if so, how you would market it to your customers.