Fighting the 40 billion food fraud to protect food supply

01 February 2016 3 min. read
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Food safety has been an issue in recent years, from the powdered baby milk formula contaminated with dangerous levels of melamine to horse meat sold as beef. The incidents caused considerable reputational damage to a range of firms, costing billions. In total, PwC estimates that food fraud costs the global food industry up to $40 billion a year. In a bid to help companies identify fraud in their supply chain, SSAFE, PwC and two university partners have developed a food supply chain vulnerability tool aimed at providing an initial means to mitigate and inhibit fraudulent activity.

SSAFE was founded in 2006 with the aim of engaging public private partnerships to bring improved food safety standards globally through internationally recognised food protection systems. The organisation itself is not-for-profit and is supported through its membership and partner structure. Partners include the World Organisation for Animal Health (OIE) in Paris, the Food and Agricultural Organisation (FAO) in Rome and the World Bank in Washington, D.C.

Partners developing a food supply chain vulnerability tool

The dangers of food fraud remain a key risk in the wider food supply chain. The effect of fraud has been seen in a number of international incidents, from the use of plastic in baby feed in China, to the sale of contaminated horsemeat in the European market. These, and many undisclosed incidents, may cause considerable health or emotional damage, while lining the pockets of fraudsters. According to PwC’s research, food fraud in the wider supply chain affects consumer confidence and is estimated to cost the global industry $30 to $40 billion a year.

Many of the world’s food supply chains are not well set up to deal with potentially fraudulent activity. The simplest foods may now require input from thousands of suppliers around the world, increasing the number of vectors for fraudulent activity. Tackling the incidence of such fraud has seen SSAFE work with PwC, as well as the University of Wageningen RIKILT and the Vrije University of Amsterdam, to develop a tool that helps organisations recognise weaknesses in their wider supply chains in which fraudulent activity may be taking place.

The tool involves 50 questions that help to identify where vulnerabilities exist, as well as provide details of how to meet the new requirements of GFSI (Global Food Safety Initiative) recognised certification schemes. The tool covers an organisation’s potential vulnerability to fraud at an ingredient, product, brand, facility, country or company-wide level.

Fighting the 40 billion food fraud to protect food supply

“Beyond the economic cost, food fraud can harm public health and damage consumer trust. Food frauds, such as horse meat being passed off as minced beef or the addition of melamine in dairy, have increased the urgency with which the food industry is taking action,” comments Craig Armitage, PwC’s Global Leader of Food Supply and Integrity Services. “The global food industry is calling time on fraud. With the use of our freely-available online tool it will put food companies in a stronger position to identify vulnerabilities and give consumers greater confidence in the safety of their food.”

“By clearly understanding the conditions and situations that provide fraudsters with opportunities, companies can target resources and actions to detect and prevent food fraud before affected products reach consumers,” adds SSAFE Executive Director Quincy Lissaur. “Collaborating with PwC, who has a strong tradition of helping companies manage risks and improve processes, greatly improves the proposition and reach of this tool.”