Magazine article Risk Management

Dining on Deception: The Rising Risk of Food Fraud and What Is Being Done about It

Magazine article Risk Management

Dining on Deception: The Rising Risk of Food Fraud and What Is Being Done about It

Article excerpt


The last time you ordered calamari from a restaurant you may have been served pig rectum. Ben Calhoun, producer of NPR's This American Life, first reported the story in January, broadcasting a phone call in which a meat processing plant manager claims his superiors told him that pig rectum is used as imitation calamari. And when Calhoun reached out to those bosses, they confirmed the accusation, though they could not say where the imitation calamari was being sold. Though it remains uncertain whether this fake calamari entered the human food chain, there are countless other instances of diners being duped by food fraud.

In February, for example, Swedish furniture maker Ikea came under fire when traces of horse meat were found in the company's signature meatballs, which are sold on-site in its stores' popular Swede-style cafeterias. Ikea filed a police report against its supplier, Sweden-based Familjen Dafgard, which placed partial blame on slaughterhouses in Poland where the meat originated. A Dafgard spokesman was quoted on the Swedish news site The as saying he doesn't "know where in the chain the crime has been committed." Luckily for the companies and the European consumers involved, no one fell ill.

The same could not be said for the most notorious--and most deadly--example of food fraud. In 2008, Sanlu, a China-based dairy products company, was accused of adding melamine, a compound that is sometimes used to increase apparent protein content, to powdered milk. Essentially, Sanlu was guilty of product adulteration with the intent of increasing profits. But melamine, when combined with certain compounds, can be harmful. According to reports, the melamine incident killed six babies and hospitalized another 50,000. Sanlu, the manufacturer of the tainted milk, filed for bankruptcy soon after the incident.

From sausage to organic produce to pomegranate juice, food fraud and mislabeling is rampant as companies turn to cheaper alternatives of food products to inflate the bottom line. And seafood seems to be the most popular fake food. The deception is easy since there are so many fish in the sea and such limited knowledge among diners. The Food and Drug Administration lists 519 acceptable market names for fish, but more than 1,700 species are sold, according to Morgan Liscinsky, an FDA spokesman.

In February 2013, Oceana, a marine conservation organization, launched a two-year study it called "one of the largest seafood fraud investigations in the world to date," collecting more than 1,200 seafood samples from 674 retail outlets in 21 states. The results were shocking. Nearly nine in 10 samples sold as snapper were mislabeled, while 59% of samples sold as tuna were mislabeled. Nearly half of all food purveyors in the survey sold mislabeled fish, with sushi restaurants being the worst culprits by far. Almost three quarters (74%) of seafood sold in sushi restaurants was mislabeled, followed by traditional restaurants (38%) and grocery stores (18%).

It's a frightening realization--no longer can consumers be sure of what they're ordering at restaurants or buying from the grocer. The recent European horse meat scandal is a perfect example, but it's far from the worst. It was, however, a blow to the brand image of those involved.

Tesco, a popular UK grocery chain, faced backlash when it was forced to recall a line of frozen meatloaf after tests revealed it contained up to 5% horse meat. In the following days, the company saw its brand perception drop 15 points, according to market research agency YouGov, which tracks brand perception among the public.

The scandal affected Burger King too. Trace amounts of horse meat were found at the fast food chain's supplier in Ireland a month before the Ikea incident was exposed. Though the supplier issued a recall of 10 million burger patties in Britain and Ireland, Burger King decided to transition all U. …

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