Europe’s ‘Mad Cow’ Scare Has Left a Mark on Leather Supplies

Europe’s “mad cow” crisis has already drastically changed the way Germans eat. Soon it may alter what they wear and how their furniture and cars are upholstered.

Demand for beef has dropped as much as 80% since the discovery two months ago of German cows infected with bovine spongiform encephalopathy, or BSE. Farmers have been sending far fewer cows to the slaughterhouse, contributing to a dearth of leather across the Continent.

The shortage is nudging up prices for shoes, handbags, belts and clothing, and even steeper increases are forecast for the furniture and auto industries, the biggest buyers of high-quality leather produced in German tanneries.

BSE, known as mad cow disease because of its brain-destroying effects, has devastated meat industries throughout Europe as cases have been discovered in Britain, France, Spain, Austria, Italy, Germany and Denmark.

Testing of all cattle older than 30 months is now mandatory in the European Union’s 15 countries to ensure that infected meat doesn’t reach the consumer market. Nonetheless, beef sales have fallen sharply, especially among Germany’s food purists. Thirty countries have banned the import of European beef.

“The slaughterhouses are only handling about 30% of their normal volume because of the drop in demand for meat, so that means we’re not getting our usual supplies of hides,” says Erwin Haas of the Assn. of German Leather Clothing Producers in Munich. “This is going to have serious consequences for the price of all leather goods.”

Germany tanneries buy almost all of the hides of the 4 million cattle slaughtered in the country each year, producing 20 million square yards of leather annually, says Reinhard Schneider, spokesman for the German Leather Assn. in Frankfurt, which represents 70 tanneries.

Although clothing makers were the first to see the supply squeeze and make it a key subject at fashion trade fairs in Cologne and Miami last month, Germany’s luxury auto makers and furniture producers are the bigger customers and will be feeling the shortage most severely, Schneider says.

Major shoe manufacturers have already raised prices because, with their faster production schedules, they are already feeling the shortage’s pinch.

Because of the higher prices for raw materials, which make up 30% of shoe and boot production costs, prices have jumped about 5% in recent weeks, says Jordan Erfling, spokesman for the Gabor company in Rosenheim, which sold 7 million pairs of footwear worldwide last year.

EU officials in Brussels are working out the details of a plan to remove supplies of unwanted meat that are depressing the market. The plan calls for slaughtering and incinerating 2 million older cows, 400,000 of them in Germany, which has already killed and cremated several hundred cows for fear of BSE infection.

Some consumer advocates are calling on the EU bureaucrats to allow the hides to be salvaged because the animals are being slaughtered as a market correction rather than an action against possible infection.

Those in industries suffering the economic consequences of mad cow disease are arguing for doomed cattle to be tested in order to salvage the hides of the vast majority of animals likely to be free of the disease.

“There is so much emotion fueling the BSE crisis that it’s hard to say if we’ll be able to use even the hides from these cattle,” Erfling says. “At the moment, the push seems to be for incinerating the whole slaughtered animal, including the skin.”