Food fraud: Can you tell your supply chain story?
The past half a century has seen a revolution in the way that food is produced, processed and marketed. Today, people are accustomed to choice, convenience, quality, and competitive prices when it comes to the food they buy. The complex nature of our globalised food supply chains and the economic motivation to provide cheaper food products, has contributed to the growing problem of food fraud, with scandals such as horse meat in beef products drawing worldwide attention.
The food industry has advanced at a rapid pace, with consumer sensitivity to food safety scares and food fraud scandals being further amplified by rapid communications, such as social media. This has highlighted the importance of having robust measures in supply chains to detect and prevent fraudulent practices.
What is food fraud?
Food fraud is defined as any deliberate action of businesses or individuals "intentionally causing a mismatch between food product claims and actual food product characteristics, either by deliberately making claims known to be false or by deliberately omitting to make claims that should have been made." As defined by the European Commission Food Fraud Policy.
Types of fraud
European Commission; Food Fraud
Why is it important to prevent food fraud?
While it is not the intention of food fraud to harm consumers, such acts can cause illness and even death, consumers should have confidence that their food is safe and what it says it is. Michigan State University’s Food Fraud Initiative, estimated that it costs the industry globally between $30-40 billion per year, impacting all aspects of the food and beverage supply chain.
Jamie Jarczewski, Senior BDM at Muddy Boots suggests food fraud is a problem that shows no signs of slowing down and will become increasingly problematic ‘in a world where there are huge challenges in the food supply chain, availability issues caused by Covid-19 and a drive towards more sustainably sourced products.’
In 2013, horsemeat was found in burgers and ready meals sold in UK supermarkets. Although not physically harmed, consumers who thought they were eating beef were mislead resulting in a loss of consumer confidence. The incident highlighted the vulnerability of the food supply chain and Tesco, one of the supermarkets selling the adulterated meat, underwent a financial loss of €300 million in market value and a negative impact on the brand’s public reputation.
Jamie Jarczewski explains ‘The horsemeat scandal opened the lid on deliberate and illegal fraudulent activity within supply chains that has been occurring for many years. This practice continues today, whether it is herbs and spices, olive oil, honey and or misleading claims regarding organic status, fraud poses a massive challenge and cost for the food industry.’
The food industry considers the safety of its products as its main concern. Over the years, industry and regulators have developed food safety management systems, making major outbreaks of food poisoning unusual in many countries. These systems typically use Hazard Analysis Critical Control Point (HACCP) principles, which are accepted globally. HACCP has proven to be effective against accidental contamination.
Eliminating food fraud from your supply chain
When analysing your relationship with current suppliers, assess how long you have been doing business together, how fast issues are resolved, and or customer complaints that lead back to supplier issues.
if you identify high risk in the complexity of your supply chain, your control could be to implement a more robust approved supplier program that reviews, in detail, how your supplier mitigates the risk of fraud before the product is delivered to you. Once your assessment is completed and controls are established, your program will need to be maintained by conducting a continuous analysis to determine whether any of these factors change.
Use the data collected from your supply chain to showcase as real-time evidence. Demonstrating how you are meeting your brand commitments and promoting good news stories to your customers and consumers alike.
‘Muddy Boots provides a suite of sophisticated solutions around supplier management, giving a first line of defence in mitigating the risk of food fraud for retail and supplier customers, right across the food industry. Understanding who is in your supply chain and using this to harness compliance information and data to ensure they are fit to supply, forms the backbone of minimising the risk of food fraud.’ Jamie Jarczewski
Key actions in preventing food fraud
- Collaborate directly with your supply chain to ensure that they are always compliant – giving you peace of mind that all suppliers are approved to supply
- Set out your requirements for 'approved to supply', such as uploading their compliance documentation, completing a self-assessment, or mapping their source locations
- Map your supply chain, visually seeing who is in your supply chain, where they are and what they supply you gives chain of custody insight, helping you track product routes back to source
- Track, measure and manage compliance with your own self assessments; system-generated alerts for impending tasks and compliance expiries
- Proactively managing and responding to risks will help you spot trends over time, drive timely business decisions and immediately respond to any fraudulent activity
- Maintain robust document controls
‘All of these key actions are deliverable through Muddy Boots Greenlight Supplier Management and Assessment tools with powerful insights and analytics. We are now taking this to the next level through forming a partnership with Food Forensics, providing moderated daily insights, searchable by category/commodity and country, covering all aspects of food risk, integrity and adulteration.’ Jamie Jarczewski
The future of food fraud
Transparency and data-sharing between national governments, agencies and industry is key to detect and prevent fraudulent practices.
Recent food fraud crises have highlighted the need to reinforce companies’ ability to combat fraud with their own self-assessments – within their own organisation and across the entire food supply chain. Companies are expected to work proactively towards mitigating the risk of food fraud, with robust document control measures in place.
As food supply chains become more globalised, food fraud is likely to increase. Fortunately, by putting a plan in place that assesses, controls, and continuously evaluates your risk, you can effectively eliminate food fraud and adulteration from your supply chain.
Sources - European Commission; fraud, monitoring and controls; food fraud, IFIS Food and Health Information, Nestle; Food fraud prevention, Food safety strategies; preventing food fraud and adulteration.