Tackling food fraud. Do you know what you are really selling?

11 January 2016

Food scandals have been on the rise in recent years. When news of horse meat being sold as beef broke, even consumers outside of the affected region exercised caution in their future purchases. It has been three years since the scandal, but it remains vividly remembered by consumers globally.

Closer to home, we have seen fake herbal tea imports being sold here in Singapore and it was reported that the Malaysian government seized imitation food products in a raid last year.

According to the Global Food Safety Initiative, food fraud refers to a deception of consumers using food products, ingredients and packaging for economic gain and involves any substitution, unapproved enhancements, misbranding, counterfeiting, and stolen goods.

Hence it is vital that companies continually ask themselves – What am I really selling?

Beyond the economic cost, estimated by the Grocery Manufacturers Association (GMA) to be US$10 to US$15 billion annually, a single food fraud incident can lead to serious health risks for consumers and adversely damage your business’ brand and hard-earned reputation. It can make a company go out of business.

Yet, food counterfeiting is expected to continue, despite how seriously food companies take this issue. The rising cost of food production, coupled with intense competition in the retail sector, is creating new challenges – resulting in increased complexity in food supply chains, which presents many opportunities for food adulteration.

As the awareness of food safety and integrity continues to rise, tackling food fraud gets more demanding as it faces these challenges: a lack of upstream supply chain visibility, poor supply chain risk management practices, low margins and the presence of complex and constrained regulatory frameworks.

While food fraud is not new and the vast majority of food is safe, regulators, food companies and consumers are taking fraud very seriously. Food is an industry where customer trust and confidence is paramount. It is critical for governments and the industry to take a strategic and innovative approach to tackle the problem effectively.

How confident are you in the integrity of your food products? Here is a checklist of questions that you need to continuously ask yourself:

  • Is fraud considered a significant issue in your industry and company?
  • How simple is it to adulterate or counterfeit your products?
  • Do you have reliable detection methods in place?
  • Are you able to rapidly report incidents?
  • How would you describe your production lines and process activities?
  • How transparent is your part of the food supply chain?
  • Do you know your suppliers, and beyond tier one suppliers?
  • Do your suppliers have counter food fraud strategies in place?
  • How robust is the recall process you have in place?

To ensure resiliency in your end-to-end food supply chain, it is essential that your company takes a proactive approach to tackle food fraud. Your first step may be to assess your company’s vulnerabilities using the free-to-use food fraud vulnerability assessment, available at www.pwc.com/foodfraud.

Jointly released by PwC and SSAFE, completing this online assessment will provide you with your company’s potential food fraud vulnerability, which can form the basis for the development of controls to reduce identified vulnerabilities.

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