Magazine article Risk Management
Food Fraud: It's What's for Dinner
That delicious wild salmon on your dinner plate, cooked in Italian extra virgin olive oil and served with a glass of French champagne is not only delicious, it is also expensive. But hey, you get what you pay for, right? Not always.
The production of food that is labeled and sold as one thing but is actually something else is not a new phenomenon. Food fraud, or the intentional adulteration of food with cheaper ingredients for economic gain, has made headlines in recent years. In 2008, milk adulterated with melamine (a chemical that makes milk appear to have a higher protein content) caused 900 infants in China to be hospitalized for kidney problems, six of whom eventually died. In 2007, the University of North Carolina found that 77% of fish labeled as red snapper was actually tilapia, a less rare, expensive and flavorful fish. That same year, investigators in Florida found that much of the grouper being sold in restaurants throughout the state was actually catfish or other types of cheaper whitefish.
The problem is even worse in Europe. In November 2010, Europol, the European Union's criminal intelligence agency, teamed up with international law enforcement agents at Interpol to conduct a week-long investigation into food fraud in various countries. What they found was startling. Agents seized hundreds of pounds of mislabeled food, including champagne, cheese, olive oil and tea from Bulgaria, Denmark, France, Hungary, Italy, the Netherlands, Romania, Spain, Turkey and the UK. The total value of the goods was an estimated 300,000 [euro] (or about $400,000).
The risks associated with food fraud are numerous, with the most dire being the health risk posed to the public. But for corporations within the food manufacturing business, there is another concern. "I think the biggest risk is brand reputation risk," said Don Hsieh, director of commercial and industrial marketing with ADT Security Services. "Global brands have a reputation to protect. Their products mean something in terms of quality, and the consumer expects them to be safe."
Just like the companies behind what is now known as the largest food fraud in U. …