In times of economic crisis, consumers look to source cheaper products and find a bargain. Despite the best efforts of the food industry, regulators, governments and investigators, an economic crisis presents opportunities for criminal organisations to make money from food fraud.
Across the EU food fraud was thrust into the spotlight in 2013 with the substitution of cheaper horsemeat in products marketed and labelled as containing beef. It was a fraud that cut across many respected retailers and food manufacturing brands and shocked consumers. In its wake, investigations have increased, and both retailers and manufacturers have become more aware of the fragility of their supply chains. Unfortunately, it hasn’t stopped the criminals.
Infant Formula Regulations Tightened
In China and New Zealand, the governments have been forced to change regulatory controls on infant formula, following an increase in complaints about ‘imported’ products. In an increasingly common fraud, manufacturers are marketing ‘imported’ products billed as reputable in another country, frequently New Zealand. However, the products are often not known abroad, or simply imported in bulk, diluted and repackaged. This type of fraud has increased as China’s consumers favour imported ‘foreign formula products, following the melamine contaminated baby formula scandal in 2008. A similar scandal has also been identified in Vietnam.
In response, China has introduced a new regulation to stop bulk imports of infant formula being diluted and repacked for onward sale. To protect its reputation for good quality dairy produce and improve transparency in the export market, New Zealand’s government now requires all baby milk manufacturers to register their brands with the Ministry for Primary Industries.
Counterfeit Spirits Prosecution
Fake vodka, with high levels of methanol and added bleach to lighten its colour,was discovered being manufactured in the UK. In a fraud that cost the government an estimated £1.5 million in lost revenue, investigators found genuine vodka bottles, near-perfect counterfeit labels and duty stamps destined for sale in small shops across the country. In this case the gang leader was caught, prosecuted and sentenced to seven years in jail. However, similar frauds continue. Fake spirits have been identified across the EU. In the Czech Republic, in 2012, more than 20 people died as a result of drinking counterfeit spirits.
Fake and mislabelled honey is a worldwide problem. In a recent case dubbed ‘honeygate’, a US investigation into illegal honey imports from China led to the arrest of and charges being made against five individuals and two honey processors. Honey from China was shipped to a number of countries, where it was re-labelled and sometimes filtered, before being transported to the US, where fake documents helped it through customs.
Keen to profit from this burgeoning market, fraudsters are also manufacturing artificial honey, which contains absolutely no nectar, being simply a cocktail of chemicals.
France too has been shocked by its own honey scandal. A recent study revealedthat some 10% of honey consumed in the country is ‘fraudulent’. Samples of products labelled as being of French origin were, on testing, found to be from China and Eastern Europe.
With a growth in popularity, olive oil is another boom marketer for growers, but has also attracted the attention of criminals. This premium product has been found to be adulterated with water or cheaper substitutes.
Whether passing off inferior products as branded or top-quality, as well as labelling intensively farmed produce as wild, organic or free-range, criminals are still counterfeiting. Consumers lose faith in the products they purchase, or become ill. Retailers, producers, processors and manufacturers lose customer confidence and suffer damage to their brands and endure sales losses. Governments lose revenue from duties and taxes and must invest heavily in regulating the industry.
Food counterfeiting and fraud is not a victimless crime at any stage of the supply chain.
Implementing a food safety management system is not enough. At every stage of the food supply chain businesses need to ensure that they can rely on the veracity of suppliers. Testing and verification, spot checks and audits should be used to support a food safety management system.
For further information on SGS please visit our website at: www.foodsafety.sgs.com.
Food Scientific and Regulatory Affairs
SGS North America, Inc.
t: +1 973 461 1493