Food fraud: Are you properly protected?

Food fraud could mean unsafe food, unfit for human consumption and/or food without proper traceability and safety checks, not of the nature, substance or quality demanded, either by the consumer or your contractual terms, entering into our food products with potentially criminal liability for directors who are unable to establish they took all due diligence and reasonable precautions to avoid committing offences under food legislation.

Olive Oil

This summer we have seen even greater pressures on the olive oil industry as wild fires in Greece have decimated olive trees.

Olive oil crime has been on the rise as record prices for the cooking staple over the past couple of years have made it even more lucrative for fraudsters to sell fake extra virgin olive oil.

18,000 litres of fake olive oil were seized in Portugal last week.  The Portuguese Food & Economic Security Authority seized over €57,000 (£48,000) worth of cooking oil, along with 177,690 labels mentioning olive oil.

It follows a major operation by the Italian carabinieri where police seized a total 42 tonnes of faux extra virgin olive oil worth €900,000.

Europol warned last year that “a mix of various factors, such as the general inflation of prices, reduced olive oil production and increasing demand, have created the perfect breeding ground for fraudulent producers”.

What can food businesses do to protect their food supply, consumers and brand reputation from fraud?

There are ongoing checks, audits and risk assessments that should be being undertaken generally in relation to food products, suppliers, supply chains and contractual obligations.

In addition to these, food producers should assess the risk to their supply chains specifically in light of pressures from current market conditions and shortages.

1. Follow the money

• Identify where in the value chain of supply there is a temptation for fraudulent activity:
• Where most value can be added?
• Where is there most demand and/or scarcest supply?
• Where is a cost that can be avoided?
• What the benefits are?
• The potential for detection?

2. Where are you weakest?

• Whereabouts along the supply chain is your product most vulnerable?
• What does your company buy a lot of that could be subject to bulking or diluting to a degree that could not be immediately apparent?
• What do you source that is particularly expensive , scarce or in high demand?
• What do you source that is untested or via middle-men or outside UK/EU?

3. What’s your risk profile?

• Raw material quality, cost and availability
• Adulterant material cost and availability
• Profit associated with delivery of goods
• Loss and consequence associated with a failure to deliver goods
• Economic circumstance (market, corporate and individual)
• Perception of associated risk and consequences
• Likelihood of being caught
• Consequences of being caught

4.  Reduction of that risk

The shorter the supply chain the less the risk of criminal infiltration. Keeping supply chains to known factors and using HACCP risk assessment templates will help to reduce the risk of food fraud.

Testing and auditing are the usual routes to also reduce risk, these will be balanced against the costs, reliability and standards but should also be based on risk assessment principles. Where is your highest hazard or likelihood of food fraud? What measures are in place to guard against this? The unannounced audit has become much more common place and valued.

Additionally, appropriate contract terms, indemnities and warranties will serve to balance the risks out with suppliers.  Also, consideration of insurance for specific risks and availability of alternative (audited) suppliers and where they may be based.

An ongoing collaboration and communication throughout the supply chain, ensuring suppliers are aware of the demands on your product and so are prepared for corresponding supply chain peaks and troughs may assist supply pinches. Sometimes, the stability of an order over a longer duration can help both parties.  Would a reduction in payment time assist the supplier in the short term to ensure maximum quality of supply?

5.  No such thing as a free lunch

The old adage that if something seems too good to be true, it usually is, will always apply.  As an established food business, if a supply is provided below market value or if a product that was simply not able to be sourced and is somehow now in immediate supply, the onus will be on you to carry out additional checks to ensure it is legally compliant.

Other options would be to alter what is said about your own product – don’t make those voluntary claims if they cannot be substantiated.

Finally, the ethics of supply should not be forgotten. Ethical and sustainable working practices, the additional checks that these involve may mean that products are not the cheapest but provide the premium of quality and reliability to the consumer with the knowledge of the due diligence that has gone into making those claims.

Additional Reports

EU Reports on Fighting Fraud

Overview report - Fighting fraudulent practices in the agri-food chain 2024-Commission-Audit-Review-food-fraud.pdf (reading.ac.uk)

JRC Report: Fighting fraudulent and deceptive practices in the agri-food chain  2024-JRC-Food-fraud.pdf (reading.ac.uk)

M&R Food Fraud Updates

Please also see our own M&R recommendations:  Latest legal publications | Mills & Reeve | Mills & Reeve (mills-reeve.com) Also, access to NCU's tools ‘Food Fraud Resilience’ self-assessment tool - Mills & Reeve (mills-reeve.com)

For any queries on this or any other matter please do not hestiate to contact us.