In recent years, the focus of food safety has turned to recognise the risk of fraud and how it can impact the industry’s global supply chain.
Be it misrepresentation of origin, lack of authenticity or issues of pressure on suppliers driving dishonest behaviour, fraud is a key influencer to food safety. It is now very clear that food adulteration risk includes fraud risks especially in the supply chain.
Despite this, there is currently very little guidance available in the food sector as to how business’ can actively seek to prevent the risk of fraud. The key concerns for those acting to counter fraud are placed on brand protection, consumer concern and quality differential.
The global supply chains serving the food sector are susceptible to many different types of fraud:
- Misrepresentation of ingredients e.g. olive oil watered down with soybean oil or honey diluted with sugar syrup so called ‘honey laundering’.
- Misrepresentation of authenticity eg ‘Basmati’ rice that’s not Basmati or ‘handmade’, rather it’s machine-produced. This is about to get far more complex with the advent of bioengineered food.
- Misrepresentation of labelling – either citing ingredients, such as expensive saffron or truffle, when their cheaper synthetic alternatives are being used or misrepresenting the proportion of ingredients (e.g. the percentage of cashew vs pine nuts in pesto for instance).
- Switching best before dates.
Protecting your business
Sitting on the 2019 New Food Magazine’s Food Fraud Panel, Tenet’s founder, Arun Chauhan, discussed how businesses’ in the food industry can act to prevent fraud in the global supply chain.
Firstly, you need to ensure you have a plan in place which acts to safeguard your business against fraud risk. Understand where you’re most vulnerable by asking yourself, ‘what’s the worst impact fraud could have on your business?’ and develop a plan which actively seeks to prevent this from occurring. Assign team responsibilities, budget accordingly and review your processes regularly to keep them up to date and fit for purpose.
Once you have a plan, implement this throughout your business. Getting all of the right checks and balances in place throughout your systems is key to turning good intentions into consistent action across your organisation.
Lastly, and most importantly, get your company culture right. Instil a sense of ‘true north’ principles throughout your organisation. Engage them in the business so they put their heart into their role which will include them acting as your first line of defence.
There are myriad ways in which ‘corners can be cut’ to maintain the fine margins on which the food sector operates. Even seemingly minor, harmless savings can prove to be false economies when their far-reaching impacts undermine the long-term trustworthiness of your brand. Understanding how to react to those that compromise your organisation’s effort to guarantee a safe supply chain can be complex and will typically need external guidance.
Protecting your business from the risk of food fraud is a high stakes game as trust is much harder to win than it is to lose. Helping employees engage in and be part of your defence to fraud is key.
If you’re looking for specialist legal counsel from seasoned, fraud lawyers who will help you identify your risks of fraud, how to mitigate those risks and/or assist you in their investigation and recovery, then get in touch.
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