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Eyes bigger than their stomach: Deceit in the Australian food market

An increasingly common and unreported form of fraud is the deliberate misrepresentation of food products for the purpose of economic gain. "Food fraud" can occur when:

  • food is deliberately mislabelled
  • ingredients are substituted
  • a vendor misrepresents the provenance (origin) or production techniques.

It is often motivated by profit as fraudsters are able to undercut consumers by switching out raw ingredients for cheaper substitutes or cutting costs in production and safety standards. This deception often goes undetected due to the fraudster’s innovative techniques that hide the fraud across the supply chain, and the consumer may not detect lower quality food.

Food fraud has a human impact. These impacts include the loss of the nutrient and health benefits as well as serious food safety risks. Low grade and sometimes harmful substances can be added to a food product to reduce production costs and turn a larger profit. Dried herbs and spices are a key product at risk of such adulteration (the action of making something poorer in quality by the addition of another substance). Food fraudsters will add an adulterant (contaminating substance) like saw dust, corn-starch or lead compounds to pad out the expensive genuine spice. The Australian Competition and Consumer Commission issued producer Hoyt’s Food an issue of infringement and a $10,800 penalty for its oregano products which were found to be less than 50% actual oregano. Not only does this practice rob consumers of the nutrients they were reportedly consuming, but also places them at risk of unknowingly consuming an allergen. By law in Australia, all packaged food must include a list of all potential food allergens like nuts, eggs and seafood. Consumers are placed at significant risk when their food contains unknown additives or bypasses safety and hygiene production standards.

Food fraud can also impact the reputation of the Australian Government and Australian brands. For example, Australian wine producer Penfolds has been targeted by international criminal groups in recent years. In 2017, Shanghai Police seized 14,000 counterfeit Penfolds wines. The fake wine was sourced from overseas and re-bottled with fraudulent branding and labels. A similar bootlegging operation was uncovered in Cambodia in 2019 when police raided a black-market liquor operation. This fraud undermines the perceived quality and reputation of Australian products in the international market. Ingredient substitution and product adulteration is also prolific in the Australian honey market. A leading international honey fraud detection unit found that almost half the honey samples from Australian supermarkets were altered. While advertised as 100% honey, these samples contained sugar syrup. Artificially cheap fake honey hurts the local industry, and fear of reputational damage makes it easy for the fraud to persist.

The digitalisation of supply networks may also provide opportunity to verify and map the production attributes of products sold on the Australian market. The ability to trace raw materials across the supply chain can improve transparency and enforce provenance standards. The longer the journey from origin to shelves and the greater the number of parties involved, the more opportunity exists to commit fraud.

Pressure testing existing countermeasures can help you to scrutinise processes and consider the common methods of fraudsters. By testing controls, entities can gain a better understanding of its strengths, vulnerabilities and identify weak detection countermeasures. Pressure testing can be used to prevent and combat food fraud, to protect Australian industry and export trade from biohazards and significant diseases. For example, African Swine Fever (ASF) is a highly contagious and deadly viral disease that has spread globally since 2007. Fraudulently labelled pork products could be the accidental vehicle for ASF to enter Australia for the first time. ASF has no vaccine and kills about 80% of pigs it infects. An outbreak in the Australian pork market would have devastating long term impacts on the industry.

The Department of Agriculture, Water and the Environment has undertaken targeted operations and pressure testing to ensure that ASF does not enter Australia. They engaged in extended product testing to find non-compliance and fraudulently labelled pork imported products. During the pressure testing process, more than 44 tonnes of pork products were intercepted and 14 individuals had their visitor visas cancelled for failing to declare pork products on entering Australia.

Sample testing can also improve the integrity of food imports as its presence deters future fraudulent declaration on import documentation. New 3D x-Ray machines have also been installed in Melbourne and Sydney mail centres to help find and seize meat products entering Australia. These countermeasures maintain strong import controls and protect the Australian community from food fraud. Australia has never experienced ASF despite its prevalence in the Indo-Pacific.

Author: Breanna Gabbert

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