Food Quality Magazine
ISSUE 02 | AUTUMN 2014
The Food Fraud Kabuki Dance
John Hnatio, Ed.D., Ph.D, FoodQuestTQ LLC
Two months ago, we published a
new book on food fraud. The book
was written for many different reasons but foremost among them was
the need for a top to bottom re-look at the age old practice of fraud
and how it is affecting the modern
food industry. The publication of
Preventing Food Fraud: A Primer for
the European Food Industry fell on
the heels of the “Horsegate” scandal
in Europe. It was the outgrowth of
our work with a major European
food retailer. The food retailer was
concerned by the changing nature
of food fraud; especially the threat
posed by organized crime, and asked
us for our ideas.
We started by conducting a technical
analysis of exactly what happened
in the Horsegate scandal. What we
found was exactly what people did
not want to hear. We sought out
the enemy and it was us. The large
scale corruption that was allowed to
infiltrate the European beef market
was the result of the food industry
itself. Affecting 13 different countries across Europe, maddening millions of consumers and costing billions of Euros, the Horsegate scandal
was heralded as the “last straw” by
governments and many food executives as they tried to defend their
credibility and the brand names of
their products in the face of the
public outcry. It was the watershed
moment for the food industry to
grab the bull by the horns and tackle
food fraud.
Horsegate fell on the heels of
Honeygate where a German conglomerate was found to have masterminded one of the biggest evasions
of anti-dumping duties on record.
In all, 14 people were charged with
evading $80 million in anti-dumping
duties on Chinese honey. Two major
U.S. honey packers, Groeb Farms and
Honey Solutions imported millions
of dollars in mislabeled honey. After
paying a mere $3 million in fines it
16
was back to business. And who says
crime doesn’t pay?
It’s not just beef and honey either.
In 2013, Tom Mueller published,
Extra Virginity: The Sublime and
Scandalous World of Olive Oil,
which provides a glimpse into the
age old practice of cutting olive oil
with less costly seed oils. Today,
extra virgin olive oil remains as one
of the most commonly adulterated
food commodities in the European
Union. And the list of food scandals
goes on and on.
The majority of food fraud goes undetected. Most goes unreported.
Some food fraud scandals, if they are
big enough, become the subject of
wide spread media coverage, a mandatory government investigation or
two and political promises to “crack
down” on food fraud. Well intended
recommendations are made. Task
forces are created. Industry resists
greater regulation that will impact
profits. Time passes and the public
soon forgets about the last scandal
while awaiting the next. And, the
food fraud kabuki dance goes on
and on.
We wrote Preventing Food Fraud:
A Primer for the European Food
Industry, in the hopes of breaking
this cycle. Our thinking was simple.
We wanted to create a scientifically
defensible starting point to characterize the true scope of the food
fraud problem across Europe. Next,
we put on our “bad-guy” hat to
determine what the food fraudster
could actually do and what exactly
he would have to do to commit a
successful act of food fraud. From
here, we focused on the specific
ways to detect the food fraudster
early enough to prevent him or her
from being successful. Of course,
the key to preventing food fraud
is vigilance. Vigilance can only be
achieved by continuous assessment
of operating food fraud environment
across the entire commodity supply
chain. We looked at the role of technology in fighting food fraud. And,
most important of all, we recognized
that talk was just that-talk. Waxing
on eloquently or doing wonderful
scientific analyses about the nature
of food fraud does not equate to
real action. No matter how good
your analyses may be, addressing
the challenge of food fraud requires
easy to use tools that governments
and industry can actually use to prevent food fraud.
In this book review, we briefly summarize some of the major results of
our research including the cost of
food fraud across Europe for several important food commodities,
the scientifically derived means,
methods and countermeasures that
can be applied to prevent food fraud,
and how advances in information
technology can be used to prevent
food fraud without costing an arm
and a leg.
The Cost of Food Fraud
Most estimates of the cost of food
fraud are metaphorical. In other
words, they are not based on any
meaningful scientific analysis. In
most cases, the data collection and
analysis techniques used to estimate
food fraud losses are not valid. In
other cases, the results of small scale
sampling are improperly extrapolated across entire commodity types.
These problems quantifying losses
from food fraud are exacerbated by
industry underreporting. Industry
underreporting includes illicit acts of
fraud by food companies themselves
or the brand name damage that may
result from reporting successful acts
of food fraud perpetrated by others.
Finally, we know that most fraud
goes undetected further befuddling
our ability to quantify true losses in
any meaningful scientific way.
Given the above limitations, we nonetheless recognized that the pro-