Compliance Strategies to Address Food Fraud

The difficulty in detecting food fraud is resulting in a trend for legislation to impose more compliance obligations on food business operators. Food safety laws are increasingly sophisticated, and assign the responsibility to detect and prevent food fraud to food business operators.

The importance of being proactive

Although food safety authorities play an important role in preventing and detecting food fraud, they have difficulties identifying and understanding the full scale and nature of fraudulent activity. Therefore, this responsibility lies increasingly with the food industry. It is vital for food business operators to have a proactive and forward-planning attitude to preventing, handling and, where required, reporting food fraud. This can be achieved with food safety management schemes and internal compliance policies and procedures. A compliance strategy would typically address the following:

Step 1: Risk assessment

A vulnerability assessment is the first step to evaluating the risk and exposure of a food business operator’s operations. This assessment will consist of a detailed review of the supply chain (for example, the degree of processing of a particular product, or the ingredient, geographic location or supplier history) to identify which points along the supply chain could be most vulnerable to food fraud.

Step 2: Documentation and drafting/updating of a compliance policy

Once exposure has been identified, the food business operator will be in a better position to mitigate any risks, and draft appropriate compliance policies. Ideally, this stage will improve traceability, and help the food business operator design a simplified and more transparent supply chain.

Step 3: Implementation and monitoring

The result of the efforts achieved, following the two previous steps, must then be implemented and surveyed – by conducting supplier audits, and by educating and training employees, for instance. It is paramount that policies are constantly monitored and refreshed to ensure their efficiency over time. Food safety and the prevention of food fraud should not just be a set of documents that are forgotten on the company’s intranet; they should be an integral part of a food business operator’s company culture.

Step 4: Crisis management

In the event of a crisis, food business operators should have clear guidelines to ensure that the situation is dealt with swiftly and efficiently, by designing a tailor made crisis management procedure. Some of the critical aspects that need to be handled during a crisis are both external to the company, as well as internal.

External factors may include: (i) potential notification to the company’s customers of the fraud; (ii) the need to issue a press release and under what circumstances; (iii) understanding whether any third parties (for example, customers or third party auditors) have received or relied on fraudulent data or reports; (iv) understanding whether any false statements or reports have been submitted to any governmental authority.

Internal factors may include being able to quickly access a “contact and decision-making tree”, in order to easily identify the relevant internal stakeholders and their authorities to take the necessary decisions. It is vital to determine and contain the full scope of the fraud; or from an internal communication approach, determine how widespread the knowledge of the fraud is internally, and if this knowledge should be confined.


A merely reactive approach to preventing and handling food fraud situations is not a good-enough compliance strategy. Food business operators should ensure that they have robust mechanisms in place to prevent incurrence of fraudulent activities, in addition to ensuring that they can react swiftly and efficiently should they find themselves in these situations.

Sara Aparicio Hill is an associate at the Singapore office of the law firm K&L Gates. She concentrates her practice on ASEAN and EU regulatory and compliance matters, in addition to advising on free movement of goods and services, data protection, competition, antitrust and trade matters; with a focus on the food, functional food, beverage, cosmetics and feed industries.