The Real Cost of Food Fraud

Posted by Denis Storey on January 31, 2020 at 12:25 PM

Olive oilA few years back, journalist and New York Times columnist Deborah Blum wrote "The Poison Squad," a book detailing the birth of modern-day food safety. The book, which PBS recently repurposed as a documentary, tells the story of Dr. Harvey Washington Jr., a Purdue University chemistry professor, who, in 1883, found himself as the lead chemist of the U.S. Department of Agriculture. He immediately sought to crack down on food and beverage fraud, eventually bringing the crisis to light with a series of experiments that plied a group of volunteers – the Poison Squad – with tainted food and drinks to see what would happen. Spoiler alert: They got sick.

Decades later, his research – and the publicity it generated – would lead to the passage of the Pure Food and Drug Act in 1906.

Back then it was meat “preserved” with borax, and milk watered down and colored with either chalk or formaldehyde. Now, more than 100 years later, consumers still have to worry about bleached meat and milk that might be laced with melamine. So much for progress.

Food Fraud is Worse Than You Think

It's estimated that fraud drains anywhere from $30 to $40 billion from the global food industry every year. The Consumer Brands Association claims that roughly 10 percent of commercially produced food and beverage products are affected by fraud.Webinar: Be Prepared for Intentional Adulteration Rule Inspections

But these figures only point to the initial economic cost of food fraud. There are the health costs to consumers poisoned by tainted food and the reputation hit a brand takes when it’s revealed one of its products has been adulterated.

The most common forms of food fraud, according to regulators, include:

  1. Olive oil: Often substituted with a lower-cost alternative.

  2. Seafood: Higher-value fish and seafood products can be replaced with cheaper options.

  3. Milk-based products: Can include milk from animals (other than cows) or laced with powders, or simply just watered down and supplemented with melamine.

  4. Honey, maple syrup, and other natural sweeteners: Honey can have added sugar syrup, corn syrup, fructose, glucose, high-fructose corn syrup, and beet sugar, while maple syrup is occasionally thinned out with sugar or corn syrup.

  5. Fruit juices: Juices might be watered down, or a more expensive juice can include cheaper juices instead. Some juices are just water, dye, and sugary flavorings.

  6. Coffee and tea: Ground coffee can be cut with leaves and twigs, as well as roasted corn, ground roasted barley, and roasted ground parchment, while tea’s been discovered to include leaves from other plants, color additives, and colored sawdust.

  7. Spices: The world’s most expensive spice has been discovered with added glycerin, sandalwood dust, tartrazine, barium sulfate, and borax. Ground black pepper has been shown to have added starch, papaya seeds, buckwheat, flour, twigs, and millet. Vanilla extract, turmeric, star anise, paprika, and chili powder are other spices prone to fraud.

  8. Organic products: Often fraudulently labeled when there’s nothing organic about their ingredients or its production.

This is by no means an exhaustive list of affected product categories. Fake cheese products, for example, have morphed into a booming business over the last few years. It’s a market that’s estimated to be growing at least 10 percent annually.

A far-flung, global supply chain has made it increasingly difficult for manufacturers to track the origins of every ingredient. It’s also made it increasingly easy for bad actors to peddle adulterated goods.

The problem is even worse in the dietary supplements space, where labeling is a major area of concern. The booming CBD market is almost certain to be fertile ground for fraudsters.

Fighting Back Against Fraud

Michigan State University’s Food Fraud Initiative has emerged as a front-line champion in the fight against fraud with several education components and outreach campaigns designed to help both manufacturers and consumers fight back against fraud.

The group has broken down food fraud into a number of classifications:

  • Adulteration: Part of the finished good is fake.

  • Tampering: Legitimate product and packaging are used fraudulently.

  • Over-run: Legitimate product is produced in excess of production agreements.

  • Theft: Legitimate product is stolen and passed off as legal.

  • Diversion: Distribution of legitimate products outside of intended markets.

  • Simulation: Illegitimate product is made to look like the real thing.

  • Counterfeit: Every part of the product and packaging are fake.

The Global Food Safety Initiative is another major player in this fight. The private organization, founded in 2000, is the world’s largest collaboration of stakeholders committed to food safety, and has established a benchmarking system of food safety standards for manufacturers.

Thanks to FSMA, the FDA will soon kick off inspections to ensure compliance with the intentional adulteration rule that goes live in March. Register for our upcoming webinar, “Be Prepared for Intentional Adulteration Rule Inspections,” at 11 a.m. MST on March 5.

Tags: FSMA, Labeling, FDA, Inspections, food labels, retail