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Retail Industry News

The repercussions of food fraud are hard to swallow!


How can retailers combat it?

The repercussions of food fraud are hard to swallow!


"The risks of selling fraudulent or mislabelled products are too severe for grocers not to act. "
Daniel Ball, Wax Digital



In recent years, some high-profile cases have shown just how prevalent food fraud is in the retail sector. The 2013 horsemeat scandal is probably the most recognisable, where several food processors were exposed for supplying products, such as ready meals, that contained undeclared horsemeat. Supermarkets particularly felt the effects of it, with Tesco’s market value reducing by £300million, as many consumers lost trust in the brand.

 

Food fraud isn’t just evident in ready meals, but also with many other everyday products. Olive oil is a popular target for food fraudsters because its contents can be easily diluted with cheaper alternatives such as rapeseed and sunflower oils. Not only that, manufacturers may claim that their produce is grown and produced in premium olive harvesting countries, such as Greece, enabling them to increase the price. It’s not just food that is often faked. Alcoholic drinks, from beer to whiskey, are often counterfeit, and can cost the UK economy £1.2bn a year alone.

 

According to the National Farmers’ Union, both food and drink fraud costs the economy as much as £12bn a year. This figure is less surprising when you hear that the Food Standards Agency (FSA) predicts that 10% of the total food and drink sold in the UK is counterfeit, and it expects this number to grow year-on-year.

 

Food retailers have a legal duty to ensure that what they are selling is genuine. This is not just to ensure that it’s delivering ethically to its customers, but also to protect those with dietary requirements or allergies. Here are the top three checks that grocers, from supermarkets to corner shops, should put in place to detect fraudulent food and drink items

1.       Improve testing and traceability technology

Grocers need to be able to identify the origins of each ingredient in a food or drink product, and there is plenty of technology available to help them test and trace. Retailers can use it to pinpoint exactly where a fraudulent product has come from. Some food products, such as pesto, use ingredients supplied by as many as 50 different suppliers, making it difficult to record the origin of each component. With the right technology, retailers can ensure that ingredients have come from the supplier that the food brand claims, preventing fraudulent products from ending up on supermarket shelves.

 

Blockchain technology also gives retailers the supply chain view they need. It records and stores data for each step of a product’s production journey, providing total transparency of where a product has come from.

 

2.       Stringent labelling processes

Implementing rigorous labelling requirements makes fraud more difficult. If suppliers use unique, non-reproducible and non-reusable labels on packaging, it becomes harder for the fraudsters to add fake food ingredients that are different to those stated. This approach to labelling will also prevent dishonest suppliers from using old packaging and passing off food as a premium product.

 

3.       Rigorous supplier sourcing

A strict sourcing process for all suppliers will help grocers detect problems early and before their products hit the shelves. Using eProcurement tools, food retailers can ensure that suppliers are compliant with food manufacturing regulations prior to doing business with them. It allows them to carry out automated qualification procedures, ensuring that only legitimate suppliers are on boarded.

 

While businesses or manufacturers earlier in the supply chain might be to blame for counterfeit food and drink products, it’s the retailer that bears the brunt of customer dissatisfaction. It only takes a few unhappy customers for a brand to see its equity nosedive. The risks of selling fraudulent or mislabelled products are too severe for grocers not to act. With technology that gives retailers a better view of their supply chains, they can ensure that they only fill their shelves with authentic goods.

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