Food fraud takes many guises and is recognised as serious fraud by the National Food Crime Unit which was established in response to the horse meat scandal in 2013.
But what does food fraud look like in the fresh produce industry?
With the ever-increasing challenges facing fresh produce supply chains from climate crisis, economic instability, energy uncertainty and labour shortages, food fraud continues to grow.
This feature looks at how food fraud occurs in the fresh produce sector and how likely is it that perpetrators are already operating in within your supply chain.
For a crime to occur, there must be an opportunity, a potential perpetrator, and a victim. The opportunity is generally financial, coupled with the present market circumstances, which have generated unprecedented financial demands on everyone in the supply chain.
Food fraud includes mislabelling, adulteration, substitution, counterfeiting, theft, misrepresentation, and document fraud and it occurs as a result of deliberately changing the identification, origin, variety, or growing method of a product at any point in the supply chain.
Mislabeling this may involve misrepresenting the origin, variety, or quality of the product. For example, labeling a lower-quality product as a premium product, or falsely claiming that the product is organic or from an origin that it is not, including a different grower.
Adulterating may involve adding cheaper, inferior ingredients or varieties to the product to increase its bulk or weight or blending with other material to reduce levels of mycotoxins, pesticides etc.
Substituting fresh produce with a different product. For instance, substituting a cheaper fruit or vegetable variety for a more expensive one, or substituting conventional produce for organic produce.
Counterfeiting involves producing and selling fake products that resemble authentic fresh produce. For example, counterfeiting packaging or labels to make products appear to be from a particular region.
Theft from farms or distributors is another form of food fraud. Stolen produce may be sold on the market as legitimate products, posing a risk to public health if the produce has been contaminated.
Misrepresenting the quality, freshness, or condition of fresh produce. This may involve selling produce that is past its expiry date, misrepresenting the product's ripeness or freshness, or concealing defects or damages.
Document fraud includes incorrect or falsified certification, labelling, weights, counts, origin, and production methods.
Why does Fraud happen?
Food fraud appears in many forms. It may be a supply and demand imbalance, it may be opportunistic to increase margins, or it may be to appear to fulfil a contract where contractual penalties are punitive or may limit contract opportunities going forward.
If you are being offered something that seems too good to be true with a price below the market price when you know the market is tight – it is possible that the supplier sees you as a “soft option” to make extra money – supplying something that is not what it claims to be.
This type of fraud is frequently the result of someone taking advantage of the opportunity to label a less expensive or limited variety or conventional produce as organic, which to the untrained eye may go unnoticed. Likewise, it could involve a product from a completely different origin that is less expensive and has fewer food safety, environmental, and human rights controls in place being sold as approved origin.
Fraudsters ultimately depend on trusted connections in order to avoid detection.
The variety is a substitution, the buyer is not receiving what they think they have bought and is likely to be paying a premium for what they believed to be genuine and approved. If the variety is incorrect, it is probable that the origin is also incorrect. If due diligence has been approved for a particular grower and variety but that is not the product delivered, despite being labelled as such, this is fraudulent and brings numerous risks.
Sadly, where food fraud occurs, food safety is at best overlooked or at worst ignored, until it is too late, so what is the risk of a product not being what it says it is or from where it’s approved to be from?
If you don’t know what it is or where your produce is from how can it be verified as being genuine, safe to eat and produced in the environmental and ethical manner expected? All these unknowns create a significant food safety and, in turn, a business risk.
Health Risks If fresh produce is contaminated, it can pose a significant risk to public health.
Products can be contaminated by a range of hazards, broadly categorized as physical, chemical, microbiological, and allergenic. For example, sources of contamination can be as a result of using unauthorised plant protection products, contaminated irrigation water, infected food handlers, poor environmental or equipment controls, failure to control the introduction or cross contamination of allergens, or contamination from clandestine in loads. Hazards can occur at many stages in the growing, packing, storing, and transporting of fresh produce so it is essential that you know what you are buying and how it has been produced and handled.
Economic Risks Food fraud can lead to significant economic losses. If a fraud incident occurs, it can lead to product recalls, loss of customer and consumer trust, decrease in sales and potential loss of business.
Reputation Risks Exposed fraud can damage the reputation of industry, retailers, and individual businesses.
Legal Risks Fresh produce fraud can result in legal consequences for those involved. Regulatory authorities may take enforcement actions against fraudulent activities, resulting in fines or criminal charges.
Supply Chain Risks Food fraud can create risks in the supply chain, especially if suppliers are not adequately vetted or monitored – for example contingency suppliers. Fraudulent activities may go undetected, potentially allowing contaminated products to enter the supply chain and putting consumers at risk.
The likelihood of food fraud occurring can be calculated – it is a balance between potential reward and inducement relative to guilt, effort, and risk.
To prevent fraud in your business, you should focus on situational crime prevention. Put hurdles in the way that make it harder, riskier, and less profitable. Here are some practical steps to take:
What can you do to help your business?
Use intelligence, insight, and data to focus on risk areas.
There is a big difference between risk potential and risk intelligence. Risk potential tends to be the high value, high volume, and complex supply , whereas risk intelligence looks at supply and demand, cost differentials between origins, supply chain disruption, etc.
Increase the chances of getting caught.
Increase surveillance visits.
Implement testing programs.
Sample from suppliers on audit – it is much easier to deal with issues before they reach you.
Be unpredictable with tests and timing.
Create and revisit frequently, a robust risk assessment of your supply chains to establish threat and vulnerability risks. Risks change, the risk assessment must be dynamic.
If supply contracts have fulfilment penalties that are punitive, fraud is more likely to occur. Instead, encourage dialogue and honesty ahead of penalties to ensure you are not inducing an environment where fraud is more likely.
Let your supply chains know that you are looking to protect all parties – deterrent is effective.
The key is to target testing and the timing of testing alongside intelligence, insight, and data.
By implementing these actions, you can significantly reduce the odds of food fraud occurring in your organization.
To support you, Food Forensics has a number of practical options to assist your business in deterring food fraud, including a monthly risk newsletter, tests available for consistency with claimed origin, claimed organic production method, varietal verification, and the opportunity to develop bespoke datasets for origin, variety and claimed production methods for your supply base, alongside pesticide, microbiological, nutritional and allergen testing solutions.
It is crucial to remember that food fraud is not a victimless crime and it affects everyone in the supply chain.
Taking a proactive approach to prevent food fraud is essential to protect your business, your customers, and the industry as a whole. Reputational risk will always be defined by the weakest link in the sector.
Ultimately, ensuring you are able to demonstrate your business can deliver on its promise of quality is imperative.
Contact Food Forensics at:
Web: www.foodforensics.co.uk
Email: info@foodforensics.co.uk
Phone: 01603 274456