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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 of their names, as well as cross-border issues of jurisdiction.

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.

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Food Fraud; news of emerging issues

The macadamia nut tree out the back of my place is flowering and is covered with long, yellow flower spikes.  In a few months it will be covered in nuts.  However, in world markets right now there is a shortage of whole macadamia nut kernels.  While stocks remain scarce, macadamia products are at increased risk of fraudulent activity.  Whole kernels are less likely than other macadamia products to be affected by fraudulent adulteration, however they are still at risk of fraudulent misrepresentation of country of origin, packing date and organic status.  Nut pieces, meals and flours are at risk of fraudulent adulteration with cheaper fillers and substitutes.

Here are some other interesting issues in food fraud or potential food fraud from the last month:

Are breadfruit products an emerging fraud risk?  Breadfruit is a starchy tropical fruit that grows on large trees in the Pacific Islands and the Carribean. Breadfruit flour is said to have huge potential as a gluten-free product and breadfruit could become the next ‘superfood’, but right now demand outstrips supply and new trees take 3 to 5 years to bear fruit.  If the marketing gurus succeed in making breadfruit the next big thing, it will attract a premium price in North America and Europe and gluten-free breadfruit flour could become an attractive target for fraud.  I will be watching this product closely to see how the situation develops.

breadfruit
Is breadfruit destined to be the next ‘superfood’?

Hairy crabs, a delicacy in parts of China, are in season now, with crabs from particular lakes being very highly prized and even more expensive than their counterparts from other lakes.  A crab-marketing group representing hunters from Yangcheng lake designed an anti-counterfeiting system based on bar-code technology for Yangcheng crabs.  Unfortunately, they discovered that sellers of crabs from other lakes were forging the anti-fraud bar-codes.   I predict this type of fraud to increase over the next few years as consumers come to expect and trust anti-counterfeit measures applied to expensive consumer items.

For more on these topics plus expert analysis of over one hundred other news items from the past month, download our Food Fraud Reports.
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Food Fraud Alerts – top issues this month

Highlights from this month’s Food Fraud Report report

Cheese buyback

In the USA, the Department of Agriculture (USDA) is buying $20m worth of cheese in an attempt to improve prices.  The cheese will be given to food banks and pantries. read more

Cheese wheels on the shelves in diary production factory

Champagne doom

Champagne makers have warned of a looming shortage due to bad weather during the growing season, the worst in 60 years.  read more

Dairy prices turn a corner

Falling production and growing demand is said to be responsible for a  sudden sharp upturn (12.7%) in global dairy prices.  read more

Lead found in turmeric

Routine sampling by New York State (USA) food inspectors found high levels of lead in retail turmeric, leading to a recall of multiple brands in the USA.  read more

Spices and herbs in metal bowls and wooden spoons. Food and cuisine ingredients
Spices have long been susceptible to fraudulent adulteration

 

Allergenic adulteration of cumin

There has been a recall of cumin due to the presence of undeclared peanuts.  read more

Wheat markets in flux

Global wheat production volumes have smashed records for the fifth year in a row.  read more

 

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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.

close up of poultry processing in food industry

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

blue drums on pallet

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.

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Wine and cheese, a tale of authenticity

During my travels through the beautiful, giant world of the interverse this week, I came across two stories about ‘replica’ products.  Because I live and breathe food authenticity I follow stories like these with great interest.  My mission as an authenticity expert is to help people to make sense of the huge amounts of information, media-spin and noise around the integrity and authenticity of food, beverages and supplements.

As I read these two stories of ‘replica’ foods, I was struck by how utterly different they are from each other.  The first story is a tale of ‘replica’ cheese, which sounds like some kind of fake non-dairy product, perhaps masquerading as the real thing.  The question of whether a non-dairy product should be called ‘cheese’ hit the headlines in Europe earlier this year when a German court ruled that products made without animal milk cannot be called ‘cheese’, leaving vegan ‘cheese’ suppliers wondering what to call their products.  But this latest story had nothing to do with that; although the labelling of vegan cheese substitutes clearly has regulatory implications, I don’t consider this particular issue to be an authenticity problem as such; purchasers of vegan ‘cheese’ are most certainly aware that the product has been produced without animal milk.

The ‘replica’ cheese in this week’s story was parmesan, and no, not the kind containing unauthorised wood pulp by-products, which has also been in the news recently.  This time, it seems that cheese makers from the Italian provinces of  Parma, Reggio Emilia, Modena, Bologna and Mantua, who collectively identify their region as Parmigiano-Reggiano, have decided to pursue those from outside the area who use the product names Parmesan, Parmigiano and Reggiano for trademark breaches.  So the ‘replica’ cheese is in this story is cheese made in the style of Parmigiano and Reggiano, but not actually originating from that region.

Fake cheese authentic cheese

Is this an authenticity issue?  Perhaps.  In Europe, the cheeses in question are subject to rules of Protected Designation of Origin (PDO).  Under these rules it is illegal to call a cheese Parmesan if it did not orginate in Parmigiano-Reggiano and meet the strict manufacturing criteria of the Parmigiano-Reggiano Consorzio, an Italian consortium created by government decree.  In fact, US food giant Kraft had to rename its grated cheese ‘Pamesello’ in Europe to comply with these requirements.  In other parts of the world, the terms have come to be used as a generic name for the hard Italian cheese for which the region is known.  The Parmigiano-Reggiano Consorzio have decided to pursue sellers of cheese all over the world for claimed breaches of trademark.

Are the Italian-style cheeses in the news this week ‘replica’ cheeses?  No; they are real cheeses, made with animal milk and conforming to a certain regional style.  Would I call them inauthentic?  Perhaps.  Authentic food is food that is what it claims to be.  If a cheese is marketed with clear information about its place of origin, wherever that may be, then it is reasonable for a consumer to understand that it has been made in the style of Parma, rather than being made in Parma itself.  So according to my definition, that makes it authentic, at least when sold outside of Europe.  However, if the origin of the cheese is misrepresented by the seller, or on the label, then that makes the product inauthentic.  And, in most jurisdictions, illegal as well.

Replica wines

From ‘replica’ cheeses that are not exactly fake, my next stop on the web provided a fascinating insight into the emerging niche market of ‘replica’ wine.  Two companies are reinventing wine production and it is now possible to purchase a wine-like alcoholic beverage made without using grapes or fermentation processes.  In this case, I would say the use of the term ‘replica’ is perfect.  Ava Winery claims to have modelled its flavour profile on Dom Perignon’s Champagne, using a proprietary method that combines amino acids, sugars and ethanol in precise quantities.   Another company, Replica, offers a range of ‘masterful recreations’ of award-winning wines created by scientists using laboratory analyses of  key flavour characteristics.

While traditionalists may throw up their hands in horror at the thought of making that most noble of fermented drinks in a laboratory, there is nothing inauthentic about the beverages made by these two companies.  Both websites have very clear messages around the authenticity of their products.  Ava Winery states that their company is “in no way affiliated [with] Dom Pérignon® or Moët Hennessy USA, Inc. which does not endorse our products.”  Replica says that “Originality is overrated, especially when it’s overpriced.” Both are unapologetic about their mission to recreate fabulous flavours using science.  Replica’s range even includes a gorgeously packaged beverage called ‘Knockoff’ that is said to mimic a California Chardonnay.

Authentic, science-loving and beautiful-looking, what’s not to love?  I can’t wait to try some.

 

Credit: Replicawine.com
Replicawine.com