It's All in the Label — Or Is It?

Food fraud, has been estimated to cost the food industry $30 to 40 billion per year.  

Food fraud is a growing concern. Recent food fraud incidents have increased the need to protect consumers by strengthening the food industry’s ability to detect and combat fraud across supply chains.  From beef products made with horse meat to counterfeit cheese and mislabeled/disguised milk, food fraud is on the rise.

Food fraud is now a known risk to companies

Nearly £300m was wiped offthe value of Tesco aftera number of its burgers were found to contain horse meat. The 2013 horse meat scandal impacted the most part of Europe in which foods labeled as containing beef were found to contain undeclared horse meat.  Fortunately for Tesco, they were able to survive such a scandal due to their size, smaller businesses do not have the resources to map out dangers of food fraud in their supply chains, warns the expert who led the horse meat inquiry.

Before “horsegate”, criminal networks were involved across the food chain but were relatively under the radar. Today, food fraud is high up the list of risks being monitored by companies. “There’s now much more effort from people to understand their supply chains, where they’re trying to get their materials from and what the risks from fraudulent activity might be,” says Prof Chris Elliott, a long-time food safety specialist.

The scandal sent a shockwave through the food industry and companies realized that the traditional ‘one step forward, one step back’ approach to supply chain accountability isn’t good enough. More transparency than that of a legislative benchmark is needed to preserve the integrity, reputation and – by extension – survival of any business in the food industry. This is the reason why many UK/US food businesses have started voluntarily conducting fraud risk assessments as part of their company audits.

Network Of Costs

Companies are losing money and customers are losing faith. Food fraud is estimated to cost the global food industry US$30 to $40 billion every year. But that’s just the economic cost. Beyond the financial impact, food fraud can lead to serious public health risks and damage brands as well as creating further implications outside of its own industry.

The healthcare industry is greatly burdened by these poor supply chain risk management practices. On average, every 3 minutes, a food allergy reaction sends someone to the emergency room.The CDCreported that food allergies result in more than 300,000 ambulatory-care visits a year across the US. The overall economic cost of children’s food allergies is near $25 billion per year. The NHS in the UK is also heavily affected by these costs. The direct cost to the NHS of managing all allergic diseases has recently been estimated at over £1 billion per annum in the UK.

New legislation requiring food manufacturers and caterers to provide information on the label in a clear, consistent way makes it easier for consumers to make safer choices when buying food or eating out.  The FSMA legislation introduced by the Obama administration in 2011 has given the FDA additional authority to regulate the way foods are grown, harvested and processed. With frequent product recalls and withdrawals concerning the mislabelling of food occurring, these new regulations are welcomed by many as a way of focusing attention not just on the correct declaration of allergens but also the need for true and accurate labeling in the fight against food fraud.

Of course increased regulation have placed further demands on food processors, who have become heavily burdened with a growing number of customer and statutory audits, many of these unannounced. Nevertheless, businesses recognize that staying compliant with food safety laws is an essential aspect of operating both profitably and ethically in this industry.

So the question is, is it really, all in the label?

About AuditComply

Our mobile assessment solution, AuditComply, is enabling processors to save time and money, by helping to manage the increase in administration that enhanced compliance brings. Equipping auditors and managers with real-time data, nonconformities can be flagged, assigned instantly then followed through to completion with our full non conformance workflow. Key stakeholders receive notifications at every step of the process. The improved monitoring processes are cost-efficient, allowing better resource allocation to the areas that need it, avoiding possible crises, which may end in harm to a consumer, prosecution, loss of revenue and a damaged reputation.