Food fraud

Food fraud is not new. In fact, a 2008 QA article, Food Fakery, discussed the concept, which was then known as food counterfeiting:

Discussion abounds about protecting your product from harmful unintentional adulteration (food safety) and intentional adulteration with the intent to harm (food defense), but there is another area of adulteration that, though rarely discussed, can have a significant impact on your product or brand. That is the intentional adulteration with the intent to defraud (food counterfeiting).

That article cited Michigan State University’s (MSU) John Spink who spoke at the 2008 IAFP conference on the topic. Even then, he discussed food fraud as “a rapidly increasing problem” for which “in food alone, the global counterfeit threat is estimated at $49 billion.” And it doesn’t seem to have gotten better since then. In a presentation at the 2014 Global Food Safety Conference, Danone Corporate Quality General Manager/Past GFSI Chairman Yves Rey explained that economically motivated adulteration of food is growing in incidents.

“It’s a ticking time bomb, ready to explode,” Rey said.

While having some similarities to food safety and food defense, food fraud (or counterfeiting) is a unique, deliberate action executed for economic gain. In 2011, Spink and MSU Assistant Professor Doug Moyer published a paper, Defining the Public Health Threat of Food Fraud, describing it as “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.”

Following that, in response to the growing public health threat from food fraud (as opposed to the more commonly understood risks from food safety and food defense), MSU’s Food Fraud Initiative was created in 2013, with Spink as director. The initiative is “an interdisciplinary activity focused on detecting, deterring, and preventing this public health and economic threat,” Spink said. In addition to research, the initiative provides both university and executive education and training opportunities as well as outreach. “Previously, food fraud was not defined or holistically addressed,” Spink said. “It is a public-health food risk and is growing in awareness, concern, and danger. Current mitigation strategies focus on intervention and response, rather than prevention. Fortunately, scholars and practitioners are now collaborating to define the concept and the focus.”
 

Food Fraud Defense. In the U.S., the roll out of the Food Safety Modernization Act (FSMA) has taken center stage in the industry, however food fraud has not yet been clearly positioned in the proposed rules, Moyer said. It is not part of FSMA’s Intentional Adulteration rule. Thus, food facilities are challenged to take action to protect their brands from food fraud, while, at the same time, anticipate FSMA’s as yet undefined risk mitigation requirements. To bridge the gap, Spink and Moyer suggest that the industry explore how food safety methodologies such as HACCP can be leveraged to simultaneously mitigate food fraud risks.

In agreement with this suggestion, SGS Food Scientific and Regulatory Affairs Manager John Cook recommended that food businesses perform a risk assessment utilizing HACCP principles. He sees this as building on the answers to four key questions:

1. Where are the specific areas that food fraud could occur?
2. How do I set up a plan to prevent this from happening?
3. What areas hold the highest risk for intentional adulteration?
4. How do I defend against economically adulterated product?
    

The questions need to be answered from both a facility and a supplier standpoint. Food plants need to understand the in-plant vulnerabilities, such as mixing and liquid product storage, as well as guarding against supplier threats, such as testing of raw materials to ensure you receive what you purchase.

“The majority of products subject to food fraud are those that are most profitable,” Cook said. Some of the most common include fish, olive oil, honey, and spices. He recommends that you know the products and ingredients that you may use that are typically fraudulent, and the specific tests that need to be performed to ensure a product is not adulterated.

Spink’s recommendations for a food fraud vulnerability assessment follow a similar line of thinking:

1. Review incidents. The MSU Food Fraud Initiative developed a product-counterfeiting clustering tool, which consists of identifying the types of counterfeiting, types of counterfeiters, and offender organizations.
2. Apply the crime triangle. Visualizing the fraud opportunity as a triangle: the area inside would be the magnitude of the fraud opportunity, and its three sides the fraudster, the victim (e.g., consumer and manufacturer), and the guardian or hurdle (organizations or countermeasures which must be overtaken for the fraud to be committed). Breaking the opportunity down in this way helps in the understanding of why and where there is a fraud opportunity—and where it may or did break down.
3. Conduct a vulnerability assessment. A review of incidents and the crime triangle help develop the formula or function and increase confidence that the model captures the vulnerability. One key to this is that the assessment needs to cover all food fraud, not just adulterants. There should be a hierarchy of individual assessments that merge into one overarching vulnerability assessment, then the vulnerability assessment needs to tie into an enterprise-wide assessment system.
    

“Too many projects start with the analytical chemistry question of ‘detect an adulterant’ and then raise up. But analytical chemistry—or food authenticity testing—usually only covers the ‘adulterant’ part of the equation. To be fair, an analytical chemist has no contribution to detecting stolen genuine goods or mislabeling.”

It is only by understanding the frauds and the types of fraudsters that risks can be assessed, strategies determined, and effective and efficient tactics implemented, Moyer said. “Awareness of the various types of food fraud—such as economically motivated adulteration (EMA), theft, or smuggling—is the basis for action.”

Additionally, “prevention can only come from a fuller understanding of root causes, not symptoms,” he said. In the case of food fraud it may simply be that economic gain is the root cause; however, this does not begin to describe the diversity of fraud types and fraudsters. For example, an RFID tag on every grapefruit might provide a track and trace pedigree throughout a supply chain. But if that grapefruit is stolen and resold in an unauthorized market (i.e. arbitrage), the security feature is useless.

“Moreover,” he said, “it is an example of an expensive tactic used without a well-defined strategy. A good strategy precedes the selection of effective and efficient prevention tactics.”
 

Global Initiatives.

In July, GFSI released a position paper detailing food fraud mitigation steps the organization will require in its Guidance Document 7th Edition, to be released in 2016. Based on the recommendations of the GFSI Food Fraud Think Tank, the food industry will be advised to add two steps to its protocols: performance of a food fraud vulnerability assessment and implementation of a control plan.

“If we want to harmonize vulnerability assessments, it should be part of the GFSI scheme,” Rey said. “That is why the board decided to add it in the next edition.”

Also speaking on food fraud at the GFSI conference was Danone Corporate Quality Projects Director Petra Wissenburg, who said, “There are many types of food fraud we are trying to catch. They can all have an effect on consumers.” Some of the most common types are ingredient or product substitution; concealment; mislabeling; grey market production, theft, or diversion; unapproved enhancements; counterfeiting; and dilution.

To guard against these, a vulnerability assessment provides a better fit for food fraud than traditional risk assessment, because the hazards are often unknown or unconventional, the likelihood assessment is more important but more difficult to establish, and fraud introduces other risks such as business, trade, and consumer confidence. As such GFSI recommends that:

• The vulnerability assessment focus on your own facility, your suppliers and your parallel suppliers. “If your product is a very profitable product, there might be people who want to take a little share of that,” Wissenburg said.
• The vulnerability control plan includes a focus on food safety hazards—HACCP, food defense threats—TACCP, and food fraud vulnerabilities—VACCP.
   

GFSI is not the only global organization focused on the topic. In fact, Moyer said, food fraud has greater awareness on a global basis than it does in the U.S. “Melamine poisonings in China and the horse-meat scandal in Europe have kept food fraud at the forefront of research and legislative initiatives,” he explained. While specific risk mitigation strategies and tactics have not yet emerged, the Food Fraud Initiative is collaborating with global researchers and lawmakers. “It is hoped that international and domestic efforts will not diverge so they can ultimately be harmonized. This is a necessity given the U.S. food supply chain that continues to globally evolve.”

FSMA-required prevention is a significant trend for food safety through the Preventive Controls rule, and food defense through the intentional adulteration rule. “What is being lost is the prevention of food fraud including risk assessment, or as we suggest—vulnerability assessment,” Moyer said. “This trend is nearly the opposite for the rest of the world where food fraud and food crime are much more clearly understood—and being reflected in impending rules and legislation.”

One example of a national initiative is that of the U.K. which has established a national food fraud database within its Food Standards Agency (FSA) website, Cook said.

The database, according to the website, “is a resource for detecting emerging patterns of fraudulent activity, and for local authorities seeking information to assist with their investigations into food fraud incidents. Intelligence is received from a variety of sources, including local authorities, consumers, industry, government departments and other enforcement bodies.”

Through the site, local authorities also can request advice and assistance, and apply for financial support from the FSA for their enforcement work.
 

The Final Word.

“A key point is that there are macro- and micro-level factors,” Spink said. The global price change of a commodity increases the fraud opportunity on the macro level. But the bad guy is not “the world,” but a single enterprise. That individual makes a decision to commit fraud based on micro-level factors (e.g., does he or she have access to be able to covertly sneak product into the supply chain?)

“Often the individual has an incredibly high fraud opportunity based on micro-level factors. So, if we only consider macro-level then we’ll miss the fraud opportunity and be dangerously optimistic that we understand the system,” he said. 

What it all comes down to, according to Spink and Moyer, is that if you are making a profit, you are a potential target for food fraud. The fraudsters are stealthy and well-funded. Their goal is to make money, but they also have the unique ability to harm the public. Whole brands and industries are at risk from a sensationalized food fraud event ... which is obvious from historical food safety—and food fraud—incidents.

The author is Editor of QA magazine. She can be reached at llupo@gie.net.