Combatting the Global Crime of Food Fraud

To meet growing consumer demands, our food chain has become global, dynamic, heterogeneous, and more complex in nature. Foods once considered exotic or seasonal are now available year-round in developed markets. Consumer demands extend to food products that have credence claims such as sustainably sourced, fair-trade, non-GMO, organic, vegan, vegetarian, and more. But how can consumers verify these credence claims and be protected from food fraud? The need for greater supply chain transparency to increase consumer trust in safe, nutritious and authentic foods has never been more profound. Yet, globalisation of the supply chain is not the primary reason for food fraud, which exists within sovereign nations and may be rampant within free trade zones. The question is whether current laws and regulations are adequate to protect consumers, or whether they create an environment of “blind trust” where food fraud can flourish.

The horsemeat scandal in 2013 highlighted public and private sector complacency. It served as a wake-up call for stakeholders, although the European Commission shifted the blame toward the economic operators. Four years later, a recent joint Europol and Interpol Operation called OPSON VI uncovered 9,800 tons of fake and unsafe foods worth more than 230 million euros.

So, what have we learned from the horsemeat scandal? Not much, it appears. Françoise Dorcier from Interpol commented: “This operation [OPSON VI] has once again shown that criminals will fake any type of food and drink with no thought to the human cost as long as they make a profit. Whilst thousands of counterfeit goods have been taken out of circulation, we continue to encourage the public to remain vigilant about the products they buy”.

While Europol and Interpol should be congratulated on the OPSON VI success, it is nevertheless interesting to interpret the Interpol comments regarding consumer vigilance. What does this mean? And how can consumers be vigilant apart from not buying foods from dubious sources? Often, food fraud is undetectable before or after purchase. OPSON VI uncovered undeclared peanuts in hazelnut spread in Germany, counterfeit seasoning in France, and repackaging of expired sardines in Portugal. There is no doubt that consumers need to be aware that food fraud exists. But there is a broader consumer trust issue in the entire “food system” including its regulations, enforcement, industry standards and practices, credence certifications, and market surveillance.

Although not often discussed in consumer or industry publications, food is considered to have attributes that fall within one of the three categories: search, experience, or credence1. With search, the consumer can find information about the product before purchase (such as price, dimension, size, color, etc.). The consumer must buy and consume the product to experience some attributes (such as flavour, taste, texture, etc.). Whereas a credence attribute such as organic, 100% beef, non-GMO, halal, kosher, etc., cannot be determined by the consumer before or after purchase. For this very reason, credence-related claims require extra attention in order to protect consumers from food fraud.

Some credence claims such as 100-per cent beef or a specific species of fish can be forensically tested and verified. However, the horsemeat scandal highlighted that stakeholders were ignorant of this emerging risk and responsible authorities were not testing for it, with one exception: the Food Safety Authority of Ireland (FSAI) that uncovered the fraud. Credence claims usually have an on-pack seal, label or logo that signals the attribute as certified by a governmental agency, or a third party organisation, such as the U.S. Department of Agriculture (USDA) Organic. However, with limited space on product packaging and literally hundreds of competing credence logos, this poses a credence claim verification problem for stakeholders, and blatant food fraud goes unchecked daily in every country, while consumer trust in credence remains low.

The perpetrators of food fraud are both organised crime and bad actors in the legitimate supply chain, seeking economic gain and with total disregard for the interests of their trading partners and the interests and safety of end consumers. Moreover, online articles abound with discoveries of fake organic, fake halal, fake kosher, fake fish, fake olive oil, and more. Furthermore, we know that more Manuka honey is sold annually than is produced in New Zealand. Apart from the recurring Operation OPSON, not much in the way of prevention, detection and successful prosecution is reported. The Canadian Food Inspection Agency’s (CFIA) website lists 3 food fraud-related prosecutions so far in 2017. In 2016, there were 11 such prosecutions, 12 in 2015, and seven in 2014. According to Spink and Moyer (2011)2, “Food fraud is a collective term used to encompass the deliberate and intentional substitution, addition, tampering, or misrepresentation of food, food ingredients, or food packaging; or false or misleading statements made about a product, for economic gain.”

How can we address food fraud?

1. Governments and industry should have an “Elliott Report” response with an action plan.

The post-horsemeat “Elliott report”3  published in 2014 found concerns related to regulation, enforcement, and industry practices. The report makes eight recommendations including (1) consumers first, (2) zero tolerance, (3) intelligence gathering, (4) laboratory services, (5) audit, (6) government support, (7) leadership and (8) crisis management.

2. Regulation and laws must extend beyond food safety to include food fraud.

A recent paper4  in the Cambridge Law Journal suggests that the EU’s regulatory framework proved inadequate in dealing with the horsemeat scandal and may have unintentionally helped by creating an environment of “blind trust”. The paper further notes: “Beyond the regulatory system, the EU’s core Treaty commitment to the free movement of goods may also have laid the ground for complex and opaque supply chains into which unscrupulous traders and middlemen could slip unnoticed”.

3. Credence verification needs an overhaul – and improved governance.

The rush toward food chain transparency is fraught with concern. As Bullock (2015)5  highlighted in an analysis of 245 USA-based eco-award schemes and environmental ratings (existing up to 2010), only two companies had a balance between (1) transparency, (2) independence of the auditor from the company under review and (3) usage of expertise (scientist level with peer review of results). Bullock’s research raises important questions for economic operators and 3rd party auditing firms. His findings may partially explain why “56 per cent of Americans do not trust companies’ green claims”.

In my opinion, economic operators in the food sector and governments who claim to be serious about reducing food fraud MUST read and understand the Elliot report and consider its recommendations. Furthermore, while the food Industry strives to improve its global supply chain governance and transparency, Bullock (2015) provides solid research and evidence on how credence attribute governance is flawed. Finally, regulations and laws must also adapt to a broader focus beyond food safety to ensure consumers are protected from economically motivated food fraud. The Cambridge Law Journal report provides a solid argument for regulators to consider.

1Moser et al. (2011) Consumer Preferences for Fruit and Vegetables with Credence-Based Attributes: A Review
2John Spink and Douglas C. Moyer. Defining the Public Health Threat of Food Fraud. Journal of Food Science. Vol. 76, Nr. 9, 2011
3https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/350726/elliot-review-final-report-july2014.pdf
4Runners and Riders: The Horsemeat Scandal, EU Law and multi-level enforcement. Cambridge Law Journal, 76(1), March 2017, pp. 116–144
5Bullock (2015). Signaling the credibility of private actors as public agents: transparency, independence, and expertise in environmental evaluations of products and companies. Bus. Polit. 2015; 17(2): 177–219


John Keogh is the president and principal advisor at Shantalla Inc., which provides advisory services in the areas of trade and supply chain management, food safety and public-private partnership.