China

19th September 2018 by foodfraudadvisors

September food fraud update; trade wars, fruit scares and spuds

The ‘trade war’ between the USA and China is really hotting up, with China having imposed import tariffs of up to 25% on US lobsters and other food products in the previous 2 months. The presence of tariffs greatly increases the risk of fraudulent cross-border activities; Food Fraud Advisors predicts that the new China tariffs will lead to significantly more food fraud within the Chinese-American trade sector as well as having a knock-on affect on food trade internationally.

There have already been allegations of fraud related to the tariff imposition in the North American lobster market. Canadian lobsters can be imported to China without incurring the tariffs imposed on lobsters from the United States. It has been alleged that lobsters grown in the USA are being shipped to Canada, re-labeled as Canadian lobsters then exported to China. Canadian lobster growers fear damage to the ‘Canada’ brand from these activities.

The strawberry scandal in Australia has hit local consumers, retailers and growers hard. It started with two consumers in the state of Queensland finding metal needles inside fresh strawberries. The affected brand and its sister brand from the same grower were pulled from shelves. Within days another needle-like object was found in strawberries from a different brand in a different state; the fruit source was completely different and the incident was labelled a ‘copycat crime’. In Australia strawberries are typically sold to consumers in clear clam-shell containers with four air holes in the top surface. The air holes are large enough to allow access to the fruit inside with a small sharp object like a needle while the strawberries are displayed on a supermarket (grocery store) shelf. Public response has been confusion; why would anyone want to do such a thing? Since then, other fruits, including apples and bananas have been similarly affected, again, in what appear to be completely independent occurrences. The food safety sector in Australia is at a loss as to how to prevent this type of incident; fruit is by necessity displayed and accessible for consumers to touch prior to purchase, leaving it vulnerable to malicious adulteration.

Meanwhile, strawberry growers in Australia, who were already struggling to get good prices for their bumper harvest, have seen demand for their fruit plummet. Media outlets have published reports about farmers who are dumping tonnes of unwanted fruit because the wholesale price has fallen below the cost of production.

Whole potatoes are generally thought to be at low risk of food fraud because of their relatively low value and because of their easily recognisable form. However, like all fruit and vegetables, they are at risk of being misrepresented with respect to their geographic origin and their variety. Growers groups have demanded that government authorities investigate allegations of potato fraud in Ireland, after a successful campaign to encourage consumption of locally-grown Queen potatoes. It has been alleged that imported potatoes and potatoes of other varieties are being re-labelled as Irish Queen potatoes, providing an economic gain for the perpetrators of this fraud.

10th June 2017 by Karen Constable

Letter from Thailand – food fraud, food safety, food excellence

The World of Food Safety Conference was held in Bangkok in conjunction with THAIFEX in early June 2017. Delegates represented large and medium sized food businesses in South East Asia as well as government and trade organisations. Thai, Singaporean, Malaysian and Myanmar delegates dominated the group. The attendees were hungry for knowledge about food fraud and food fraud prevention; almost 50% of the topics across the two-day conference were related to food fraud, traceability, supply chain management and crisis management.

As well as speaking about recent trends and developments in food fraud, I enjoyed learning from the other speakers, sampling the wonders of THAIFEX and enjoying Thai food which was truly excellent.

Karen Constable spoke about Food Fraud at World of Food Safety Conference

Background checks as an aid to fraud mitigation

I was lucky to gain some fantastic insights into the intricacies and challenges of performing background checks on business people in Asia from Jingyi Li Blank, Mintz Group. Background checks on business owners are a great way to understand vulnerabilities to food fraud when seeking new suppliers or investigating sources of new raw materials. South East Asia and China present some challenges for companies performing background checks, including the way that people in the area often have multiple spellings and versions of their names, as well as issues related to cross-border jurisdictions.

Prevalence of food fraud prevention systems

Julia Leong from PricewaterhouseCoopers shared some statistics on current levels of compliance among food companies who have interracted with the PwC SSAFE tool: 41% of companies have no systems to detect or monitor fraud, 36% have no whistle-blowing systems and 38% do not perform background checks on employees. Food businesses that neglect these areas are exposing themselves to serious financial risks from food fraud.

Support for food businesses in developing countries from GFSI

It was heartening to hear about the new program being launched by the Global Food Safety Initiative (GFSI) in developing countries. The Global Markets Program is designed to bridge the gap between food operations with no formal food safety systems and those who have GFSI-endorsed certification by helping companies to develop food safety management systems through a process of continuous improvement. Within the program, manufacturing support systems related to hygiene and other basic principles of food safety are implemented progressively over a defined time period as the companies work to attain either a basic or intermediate level of compliance. The results are not accredited but become the foundation for further improvements so that the business can work towards implementing a complete food safety program.

Sustainability in the food supply chain; palm oil and coconut oil

Matthew Kovac of Food Industry Asia presented on behalf of Cargill, providing a fascinating introduction to the sustainability programs Cargill has introduced in their palm oil and coconut oil supply chains. Cargill is a major grower, purchaser and refiner of palm oil and are aiming for a 100% sustainable target by 2020. For Cargill, sustainability in palm oil means:

No deforestation of high value areas
No development on peat (burning beat causes air pollution and contributes to climate change)
No exploitation of indigenous peoples
Inclusion of small land holders

Coconut oil sustainability is being improved in conjunction with The Rainforest Alliance, by providing training and support for Filipino growers so that they can increase their yields, as well as providing them with access to wood fired dryers that allow the growers to produce copra that has better colour, less aflatoxins, less environmental contaminants and lower free fatty acids than traditionally sun-dried copra.

The many and varied hazards in HACCP for fish

It was both fascinating and scary to be reminded of the hazards to food safety from fresh fin fish by Preeya Ponbamrung, from Handy International: pathogenic bacteria, viruses, biotoxins such as ciguatera, biogenic amines (histamine being the most common), parasites and chemicals such as water pollutants and antibiotics used in aquaculture. That’s quite a hazard list; it was heartening to hear Ms Ponbamrung describe the control methods employed by the fish processing industry to keep those hazards out of our food supply.

Crisis communications; winners and losers

We learnt about successful methods – and not-so-successful-methods – that food companies use to communicate food safety and food fraud risks to consumers. Nestle was applauded for its fast, clear and practical response to reports of counterfeit versions of its popular MILO chocolate drink powder in Malaysia. The brand owner promptly published instructions for consumers on social media and in the local press explaining how to tell the difference between the fake and the real product.

Image: MILO Malaysia Facebook, March 2015

Some other companies do not do so well with crisis communications. Cesare Varallo of Inscatech, showed us that the public communications of Chipotle in the USA about its food safety problems were less than ideal. The brand has suffered serious losses and it has been reported that 13% of its former customers say they will never return. Time is of the essence in a food safety or food fraud crisis. Does your company have a crisis plan?

Want to know more about any of these topics? Get in touch with us, we love to help.

17th August 2016 by foodfraudadvisors

Food fraud; meet the perpetrators

Criminals, con-men, fraudsters… whatever we might like to call them, it’s a fair bet that many people who are responsible for food fraud don’t see themselves as ‘proper’ criminals. And it’s timely to remember that, although we often talk about food fraud using abstract concepts like ‘supply chain’, and ‘grey market’, the real story behind food fraud is men and women conducting illegal activities.

So who are the people responsible for food fraud? Although research specific to food-related fraud is scarce, within the broader world of ‘white collar crime’, fraud is overwhelming thought to be committed by men rather than women. People involved in food fraud can be classified into two types;

Opportunistic fraudsters; and,
Organised fraudsters.

Opportunistic criminals are those who are ‘in the right place at the right time’. They are most likely to be an employee or owner of a business within the food supply chain who has identified an opportunity to make a profit. Unfortunately, it appears that within this group there are many who feel compelled to commit fraud after finding their business in difficult circumstances. Commonly, the fraud will be committed to meet supply contracts or expectations of customers or to prevent bankruptcy.

Organised food fraud criminals have different motivations and often work in groups that actively seek out opportunities to make money without regard for laws and regulations. Often, these criminals will operate within other industries in addition to the food industry. Their frauds tend to be larger, more complicated and continue for longer periods of time than opportunistic frauds. The people behind these crimes are less likely to be legitimate employees of the food industry, but will know people inside the industry whom they use to gain access to the supply chain. Compared to opportunistic fraudsters, the activities of organised criminals tend to involve more people and the fraud is more likely to have a broader affect along and across supply chains. Combined with the fact that organised criminals are very likely to repeat their crimes if they prove to be profitable this means the frauds perpetrated by organised criminals can have a very large impact.

	Opportunistic	Organised
Food industry connections	More likely to be employed within industry	Contacts and links to industry
Motivations	One-off financial gains or motivated by the need to prevent business financial failure or meet sales/supply contracts	Motivated by direct financial gain to support other criminal activities
Knowledge of food processes	Detailed knowledge of some processes	Both detailed and limited knowledge of various processes
Knowledge of detection likelihood	Often limited knowledge about the likelihood of detection	Often limited knowledge about the likelihood of detection
Knowledge of successful strategies	Usually well informed about the likelihood of success	Usually well informed about the likelihood of success
Repeat offences	Less likely to repeat	More likely to repeat if successful
Impact of activities	Less potential impact than organised fraudsters	Potentially higher impacts due to broader reach and higher likelihood of repeating a fraud

Food fraud perpetrators from around the globe

Yakub Moosa Yusuf has been described as Britain’s most notorious food fraud criminal and has been jailed twice over fraudulent meat trading, including selling meat that was falsely declared to be halal.

In Asia, a Taiwanese seafood company allegedly found itself with an oversupply of expensive frozen shrimp after sales were affected by a downturn in the number of tourists from China. Rather than discard the shrimp and face financial losses, the owner and his son are alleged to have tampered with the expiry dates and sold the stock, saving their business and reportedly making a tidy sum of US$22m in the process.

North America’s Mucci Farms attracted plenty of negative media attention and a $1.5m fine after a three year investigation by the Canadian Food Inspection Agency found that the business had been misrepresenting the country of origin of produce, including cucumbers and peppers, to meet the demand for locally-grown food. Inspectors first became suspicious when they noticed that the outside of some cardboard cartons appeared to have had stickers peeled off and replaced with stickers that said “Product of Canada” stickers, while stickers on the inside of the cartons “Product of Mexico.” Court documents described one scenario in which Mucci needed to supply Canadian-grown mini-cucumbers but could not find local sources.

In Europe, this French olive supplier sold cheaper Spanish olives to local olive oil producers, misrepresenting their provenance, after having problems sourcing local olives due to harvests being affected by the olive fruit fly pest.

And finally, a cab driver from Chester, in England endangered the lives of his customers by selling fake vodka containing toxic chemicals. He was found with illegal tobacco and alcohol worth £1,700.

Read Part 2 of Meet the Perpetrators

2nd March 2016 by foodfraudadvisors

Fish pizza, from the things that make me go hmmmm files (a food scientist’s perspective)

Earlier this month, just in time for the Lunar New Year, Dominoes launched a fish pizza. The toppings? Fish-shaped fish sticks (fish fingers if you are Australian), pepperoni, green bell peppers, corn, lardons (bacon), and cherry tomatoes. Fish symbolise wealth and success in China but I’m not sure they belong on a pizza. Putting corn on a pizza is already bad enough. Hmmm…

11th January 2016 by foodfraudadvisors

Fakes, frauds and fails

A light-hearted look at fake products and brand rip-offs from around the world… Food fraud is a serious problem, but when fraudsters stumble on the English language the results are sometimes pretty funny…