Eat the Food You Trust: Lessons from Food Fraud 2017
A healthy society is built on the cornerstone of trust. Our everyday relationships are centred around trust. Trust is everywhere. When we drive to work, we trust that our cars are not going to fall apart despite the fact that most of us have only a simplistic idea as to how they operate. We trust that traffic lights will function correctly so as to avoid large-scale accidents. We trust the teachers of our children; our partners; our parents.
So do we trust the food that keeps us alive and well?
Consumer trust in the food industry is on the decline in light of scandals such as the inescapable European horse meat incident in 2013 and melamine milk incident in China. These are two examples of what we call food fraud. Food fraud is sinister, vastly profitable and a very real occurrence – and you won’t find evidence of it by picking up a product and checking its label. Following New Food’s inaugural Food Fraud conference held in Manchester at which industry leaders gathered to discuss the challenges that the reality of food fraud presents today’s society, we take a look at the lessons learned from the event both on a UK and global level.
“Food fraud is a global issue,” Professor Chris Elliott of Queen’s University Belfast, asserted as he opened the event. From Professor Elliott’s opening statement, an internationally-known leader in food integrity, it became clear that we criminally under-appreciate the scale of the threat posed by food fraud and the extent to which it occurs and touches each aspect of the supply chain.
What is food fraud?
Why is food fraud so dangerous?
While food fraud might conceptually appear self-explanatory, it is worth considering the variety of real ways in which it impacts upon our society and supply chain.
Food fraud is much like other varieties of fraud in the ways in which it operates. Its impact however, is of an altogether different nature.
Here are the five empirical and very real ways in which fraud is currently diluting the integrity of the food industry.
1. Health threat
If a food product whose label claims that it contains no trace of peanuts, when in fact at some point in the supply chain the ingredients have been contaminated for whatever reason and peanuts have entered into the product, this has the potential to be fatal. It doesn’t take a genius to work out why deliberate contamination has the potential to be fatal for certain individuals with intolerances or allergies.
“Fraud financially cripples the individual or company,” Chris Elliott explained.
“Food fraud kills.”
2. Environmental damage
Fraudsters have little space in their hearts for environmental conscience. The stripping of the ocean’s rare fish that are cheaper than tuna then proceeding to claim that the products subsequently made are comprised of tuna represents an example of how food fraudsters champion economic gain over sustainable development.
3. Ethical implications
The imperative of ensuring that halal and kosher products remain so has no price for those it affects. Once again, fraudsters have no interest as to whether or not halal or kosher laws are adhered to when creating the products, but if exposed, you cannot place a value on the spiritual hurt felt by the respective religious communities affected.
4. Human slavery
We see examples of modern day slavery associated with fraudulent practice. As fraudulent activity is by definition illegal, the ways in which it is carried out have no necessary regard for regulation or legislation or for the protection of its workers. Consequently, many workers are paid next to nothing for backbreaking work in developing nations so that corrupted products can be enjoyed in the developed world for unrealistically low prices.
5. The economic disruption to the food supply chain
Overall, food fraud, introduces and perpetuates an unsustainable, unjust imbalance in the food industry that affects each and every one of us – from farm to fork.
We must remember that the overarching aim of food fraud is not to cause physical hurt, though not out of an moral or ethical imperative on the part of the fraudulent.
“The business model is not to do harm as this is easier to detect,” Professor Elliott explained.
“I often say: criminals are stupid and generally get caught. The fraudulent are clever and often avoid capture.”
Listening to the high calibre of speakers that followed Professor Elliott, it became clear that food fraud is a highly organised, profitable and very real, criminal activity and becoming more and more integrated within organised crime networks across all continents, much in the same way as drug trafficking or smuggling.
Food fraudsters operate along more or less exactly the same geographical traffic routes as the conventional streams of organised crime but is far less frequently detected.
As Peter Overbosch, former Vice President at Metro AG explains: “We often under-estimate the professional nature of fraudsters.” This is very worrying.
Be it the infiltration of the dairy industry in India; or the involvement of the Italian mafia in the trafficking of oregano; or perhaps highlighted by the ongoing criminal activity in South America exemplified by Brazil’s current meat scandal, food fraud is an intrinsically global issue and society seems to be unaware of the extent of the threat.
It is difficult to precisely estimate the global worth of the industry, but the food sector is indisputably towards the top of the league table in terms of its economic value.
So precisely what slice of this extremely expensive proverbial pie is associated with fraudulent practice?
Case Study – British Pepper & Spice
At Food Fraud 2017, we were fortunate enough to be presented with a diversity of speakers offering different angles into the issue. One of these was provided by John Hill, Technical Director at British Pepper & Spice who detailed a case study of the herb and spice supply chain, one of the most profitable and infiltrated supply chain threads. If we briefly return to the automobile analogy of the introduction, Mr Hill made allusion to the circumstances surrounding Volkswagen as he argued that a loss of consumer trust is inextricably linked to the economic progress of a company. It’s plain to see that the spot at which the share price fell for Volkswagen was a moment that directly correlated to a loss of consumer trust in the company. The emissions scandal that affected Volkswagen transformed one of the world’s best respected companies – a bastion of German efficiency and engineering excellence – into one of the most mistrusted household names. Volkswagen admitted following the incident that they had “broken the most important part in our vehicles.”
The share prices plummeted accordingly and have not recovered since. Trust has financial value for business. The food industry must learn from this.
How is this applicable to the herb and spice industry?
To detail how food fraud is affecting the spice industry, John Hill directed us towards the pepper industry. Once spread across Malaysia and most of south east Asia, the industry is now predominantly based in Vietnam. Often the production centres in which the peppers are stored and dried resemble basic shacks erected in rural Vietnam and Mr Hill explained, before showing us video evidence, that this stage at which the grinding process takes place remains the most susceptible to contamination. Chickens are seen in the footage to be running around while grinding, storing and drying is taking place.
“What do chickens carry?
This is an example of how accidental fraud in the herb and spice industry might take place. Deliberate fraud might then occur when cheaper ingredients or dust are added by criminal gangs to the ground up pepper and then shipped across the world. We are then shown the picking process as it takes place in India in footage that depicts several women picking the plants, stooped breaking their backs in the sweltering heat. The footage then cuts back to Vietnam and an alarming scene in which peppers are bleached in mass with Hydrogen Peroxide in which looks like a cement mixer.
“It’s real and it’s happening,” Mr Hill finally warned. “We need a simplified supply chain that validates, knows and uses reputable suppliers.”
The oregano issue
Oregano is another herb frequently manipulated by fraudsters. Professor Elliott opened by describing the lessons learned from the findings of a study of 25 counties of which 23 were found to be handling imperfect oregano to varying degrees, begging the question: Why are some countries 100% pure and others are not? Much like food fraud in general, the answers are exceptionally complex. The mere fact that 1 tonne of red meat equates to around £10,000 in market value whereas that of 1 tonne of oregano is worth £100,000 gives us an idea as to the true scope of the opportunity for mass-scale corruption in the herb and spice industry. Practically speaking, it’s a lot easier and more profitable to corrupt than beef for example.
Why do we have to go and make things so complicated?
In short, the food industry and its supply chain is grossly over-complicated and complex and most speakers advocated a simplification of the system at large.
“The greater the number of links in the chain, the more points there are available for penetration,” Kieran Kelly, CEO at arc-net, pointed out. The UK alone imports 40% of all food. The sheer complexity of the supply chain is exacerbated by the complication inherent in the export/import process.
It once again stems back to trust. As consumers, do we trust manufacturers? Do manufacturers in turn trust their suppliers?
“Why is it that for so many food products we are not paying the market price?” Mr Kelly reiterated.
Reaction is needed. That is why Food Fraud 2017 felt so necessary.
Solving the problem
This subheading is itself misleading as there are no black and white solutions. Fraud will always exist, it’s more important that we as an industry align our goals rather with ensuring that it is as decentivised and discouraged as far as possible. There is “no magic bullet,” Kieran Kelly outlined. Blockchain, he argued, is the answer. Perhaps there is no one definitive answer but blockchain as described would most certainly offer a technological solution to the issue.
“Lego for the digital generation,” as Kieran coined it, might help to simplify the transnational processes within the food supply chain and ensure that each link in the chain has a digital footprint with which the consumer could theoretically trace a product from farm to fork. “The transparency blockchain offers to the food industry is invaluable. It provides consumers with the tools to track each stage of the process. “Blockchain connects the product to the consumer and as blockhain is a cryptographic phenomenon available to all, it has the potential to connect all parties in order to necessarily legitimise relationships.” “The assets and borders thus become digital and we all have access as everyone seems to now use phones and interact via smart technology in the supermarket.”
Is this the engagement with consumers that the food industry needs? Certainly there is an argument that food consumers are placed in the peripheral too frequently. Is this the transparency that will ultimately restore consumer trust in the industry… and in the digital age, should this not be provided in digital terms? Though no one solution exists, blockchain might well offer a means of empowering consumers with the information and subsequent transparency they seek.
“No silver bullet”
Food fraud is a fundamentally complex criminal activity which necessitates that the solution be equally multi-dimensional. Collaboration between parties within the industry will play an unequivocally significant role. At Food Fraud 2017, Marks & Spencer, a leading British retailer, spoke about a project with which they are cooperating entitled the Food Industry Intelligence Network (FIIN). The theory behind the project is that the UK industry works with itself, each party able to engage in anonymous data sharing in order to find collective solutions to ensuring food integrity and fighting food fraud. The project has seen almost all of the major UK retailers: TESCO, Sainsbury’s, Aldi and many more, join the network which signals an extremely positive sign of future intra-industry progress.
“It was amazing how the horse meat scandal changed opinion,” Paul Willgoss of M&S stated, who co-chairs FIIN with Helen Sissons of Greencore. “Nobody wins out of a food scare and the industry – certainly in the UK – is beginning to sit up and take notice of this.”
FIIN ultimately unites both government and the industry encouraging communication between parties. In essence, we all have the same aim: ensuring the safety and integrity of our food. We must now focus on providing an environment within which this fundamental point becomes clear and communicable. “There is nothing like FIIN anywhere in the world” Chris Elliott lauded, voicing the general panel consensus that the UK is probably leading the way with respect to initiatives that fight for food integrity. There is still much to be done and many questions unanswered and Inscatech called for a greater collaboration between law enforcers and the industry.
“This is not a one country problem. If the food industry does not communicate with law enforcement then law enforcement is left clueless and powerless to act.
Inscatech went on to explain the all too frequent, dangerous proximity between the universes of audit and industry. Sometimes, the auditors of food products themselves are employed by those they are auditing and in this situation we must ask: How can an effective quality analysis occur if the audited is also the auditor?
“We need to create a culture of zero tolerance. Partnership does work.” The technical versus the commercial
Elsewhere, questions were raised by the audience with respect to how we precisely “speak truth to power?” This essentially challenges the notion that the technical world may not stand a chance against the commercial. How can science go about confronting those accountable for profit? One of the main lessons learned from Food Fraud 2017 was that we must provide the necessary platforms for science to fight back which at the end of the day stems back to the need for communication and closer relationships between all members of the supply chain. Initiatives such as FIIN theoretically provide the space within which to communicate but we need to see more of these, not just in the UK but across Europe and the entire world. As previously mentioned, food fraud is a global issue and therefore our approach must be of an international nature.
So who is going to drive this? Regulator, consumer or the industry? Ultimately, though all parties are undoubtedly implicated, this needs to be industry driven as the expert panel and audience agreed. In order to restore relationships within the industry, be it consumer to manufacturer; manufacturer to supplier; industry to regulator, each party must work together. Trust is a two-way conversation and will only work if both sides are communicating with one another clearly and transparently.
The final question remains therefore, and New Food poses this to the food industry at large:
How do we translate the rhetoric and lessons learned from Food Fraud 2017 into tangible action? I suppose we’ll have to wait until Food Fraud 2018 to answer that one….