Fake honey, fake wine, fake cherries … if there’s one thing that shook the media in 2018 (strawberry crisis excluded), it was food fraud.
So what is food fraud?
Food fraud refers to the sale of an inferior product represented as a more valuable one. It might be substitution, dilution, tampering or misrepresentation of ingredients or packaging.
Due to the covert nature of food fraud, we don’t know the true extent of the problem. Food fraud costs at least $65 billion a year globally, according to PwC agribusiness advisory partner, Greg Quinn. However, if this year is anything to go by, it is becoming more pervasive.
University of Melbourne researcher and food labelling expert Professor Christine Parker said food fraudsters were constantly coming up with new ways to cheat tests that are designed to catch them. This means, for manufacturers and brand owners, that food fraud prevention will become even more important going into 2019.
Food fraud in 2018
Was 2018 the worse year for food fraud Australia has ever seen? Quite possibly. Here’s a round-up of the headlines:
Australia’s biggest honey producer, Capilano, and some of the country’s largest supermarket chains were accused of selling ‘fake’ honey in September when testing at a leading international scientific lab found that almost half the honey samples selected from supermarket shelves were “adulterated”. In other words, the honey has been mixed with something other than nectar from bees. For the record, the producer denied that any of its products were not pure honey and rejected the form of testing as the best way to determine adulteration.
Fake health claims
In August, food giant Heinz was slapped with a massive $2.25 million fine for claiming its Little Kidz Shredz range were beneficial to the health of young children when they were about two-thirds sugar. The Australian Competition and Consumer Commission (ACCC) said the packaging was misleading because it featured images of fruit and vegetables, and states “99% fruit and veg” when the dehydrated products contain around 60% sugar.
China’s new billion-dollar online retail platform Pinduoduo has come under fire for selling copycat and counterfeit goods, including rip-offs of famous Australian wines. Due to the bargain prices, the fake wines are selling better than the genuine brands.One merchant had sold more than 1,000 six-bottle cases of their “Benfords Hyland” wine at $117 a case – with a free case thrown in with every purchase.
Tasmanian cherry producers have long been victims of food fraud. In Asia, lower grade cherries from outside Australia are being packed in look-a-like boxes and labelled as Tasmanian-grown. They are sold at the same price as the real deal, which are seen as a delicacy in Asia.
In 2018, producers turned to technology and social media to combat the fakes – we’ll talk more about that in food fraud prevention strategies below.
Food fraud Australia: what foods are at risk?
Before we talk about food fraud prevention, what types of foods are at risk? Here are a few of the common victims:
Organic, free-range, bio-dynamic and grass-fed: Certain labels attract a premium price because of the perceived health or environmental benefits. But the reality is that origins can be difficult to trace, meaning these labels are increasingly being used fraudulently.
Olive oil:In 2017, Australia’s leading consumer advocacy group CHOICE, tested 23 extra virgin olive oils bought from Australian retailers and found five didn’t meet the “extra virgin” standard. Olive oil is a popular food to fake due to the difficulty in assessing the origin and quality of olive oil, combined with lower production in different seasons. In fact, there are reports that up to 80% of Italian olive oil is fake.
Herbs and spices:The ACCC took action against oregano companies after CHOICE tested 12 samples in 2016 and found only five were 100% oregano. The major food supplier, Hoyt’s, was fined almost $11,000 for making misleading claims about their oregano.
Meat: Australia’s export beef commands impressive price tags of up to $120 a kilogram in the Chinese marketplace, however only half the Aussie-branded beef on offer actually originates from Australia. PwC estimates retail sales of fraudulent “Australian” branded beef alone is worth about $2b per year.
Liquid products:Dilution is a common method of fraud for liquid products.Fruit juices (particularly pomegranate, orange and apple juice)can be diluted with water, then added sugars, colours and flavours makes them appear more concentrated. A sorbitol analysis can be used to detect some counterfeit products by identifying whether the sugar in the juice occurs naturally or has been artificially added.
Strategies for food fraud prevention in 2019
What can the Australian food and beverage industry do to safeguard its reputation for producing safe and high quality products?
Australian brand owners need to re-build trust. When consumers buy food, they trust that the product inside the packaging will match the label. Recent food fraud incidents have left consumers questioning what they are buying and undermined the trust that’s taken years for brands to build.
One of the most effective strategies for food fraud mitigation is serialisation.
Serialisation is the process of putting a unique mark on each product and packaging level to enable traceability. A serialisation code can be as deep and detailed as the manufacturer or trading partner requires – apart from the unique identifier for each individual product it might include the Global Trade Identification Number (GTIN), product description, stock-keeping unit (SKU), lot or batch number, expiration date, and more. As such, serialisation gives the visibility manufacturers and retailers are striving for. At the same time, it facilitates authentication to assure consumers the product is genuine and protect the brand integrity.
Here are some more benefits of serialisation.
Because serialisation essentially puts the supply chain in lock-down, it is more difficult and less financially viable for counterfeiters to enter. To learn more, download our free Ultimate Guide to Serialisation – button below.
One Australian company already putting this to work is Camperdown Dairy International. They needed a solution if they were to export baby formula to China. Working with Trust Codes’ cloud-based platform, their solution uses a Matthews’ Solaris scribing laser to mark each formula tin with a unique serialised QR code (generated by Trust Codes). Matthews’ iDSnet software platform integrates with Trust Codes and the laser marking system on the production line to provide Camperdown with an end-to-end solution.
Read exactly how we did it in our case study.
Tasmanian cherry producers also use another strategy. Reid Fruits told the ABC that the fake cartons being sold in Asia were almost identical to theirs – all that was missing was the unique intricate sticker. To make it harder and more expensive to imitate, Reid now embellishes its cardboard packaging with embossing and gold foil. The company has also incorporated QR code technology, which can be scanned by customers to tell them it is an authentic product from Tasmania.
Read about how winemakers can beat counterfeiters with QR codes.
Is your brand at risk of food fraud?
Don’t wait until it’s too late – consumer trust might be quick to lose but it can be extremely time-consuming and expensive to win back. Put your food fraud prevention strategy in place now. Speak to our experts to see whether serialisation is the solution your business needs.
Looking for more information? Matthews’ resource library has lots of free-to-download information for Australian manufacturers.
Imagecredit: iStock/ nodd