What is Food Fraud and Why is it a Big Deal?

In this interview, CIFS speaks with Dr. Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University, about food fraud what we can do to tackle the problem.
May 10, 2019

Food fraud, which is generally considered to be the misrepresentation or adulteration of a product for the purpose of economic gain, is an emerging issue in Canada and around the world. The U.S Grocery Manufacturers Association estimates that food fraud may cost the global food industry $10 – 15 billion per year; some estimates put that number at closer to $70 billion.

The Canadian Institute of Food Safety (CIFS) was delighted to have the opportunity to speak with Dr. Sylvain Charlebois, a professor in food distribution and policy and Senior Director of the Agri-food Analytics Lab at Dalhousie University in Halifax, NS, about the issue of food fraud, who it affects and what we, as consumers, can do to tackle this ubiquitous problem.

Known as “The Food Professor”, Dr. Charlebois' research is primarily in the areas of food distribution, security and safety; he is one of the world's most cited scholars on food supply chain management and traceability.

What is food fraud?

Food fraud is the deliberate misrepresentation of food products for the purpose of economic gain. This can be done in a number of ways, such as:

  • mislabelling / selling a low-quality product as a premium product
  • adulterating / cutting premium products with less expensive ingredients
  • making false claims about a product's country of origin
  • making false claims about how the product was made
  • misrepresenting the product's nutritional qualities
  • misrepresenting the weight of the product


Do you remember these high-profile food fraud scandals?


Food fraud comes in many forms, but the end goal is ultimately the same — to trick the customer into paying a higher price for a product that is not what it claims to be.

Why is food fraud a problem?

Food fraud is a serious problem for a number of reasons. Not only is it deceptive and damaging to consumer trust, but it can also introduce serious health risks that the consumer has no way to defend him / herself against.

“When you adulterate a product, you can introduce an allergen that should not be in the product,” says Charlebois. “Most importantly, the consumer assumes the allergen is not in the product. This can be lethal for someone with a food allergy, and they wouldn't even know that they were taking a risk.”

Allergens aren't the only health risk; few will forget the 2008 Chinese tainted-milk scandal, in which the toxic chemical melamine was added to infant formula to boost protein levels and pass nutritional testing. According to the level set by the U.S. Food and Drug Administration (FDA), the tolerable daily intake for melamine is 0.63 mg/kg of body weight. The level of melamine in the infant formula was found to be as high as 2,560 mg/kg.

A total of 22 companies, including state-owned dairy company Yili, were found to be involved in the scandal that claimed the lives of six babies and sickened more than 300,000 with kidney stones and kidney damage.

“Many infants were hospitalized as a result of the melamine scandal,” says Charlebois. “What made it worse was that public authorities hid information from the public because they didn't want to deal with the bad press during the Beijing Olympics — but this put more people, more infants, at risk. Consumer trust in the industry has never really recovered since.”

Beyond the immediate health risks to the public, food fraud also makes it more difficult for honest food producers and retailers to compete. As responsible companies get priced out of the market by low-cost fraudulent products, consumers find themselves with fewer and fewer options for responsibly sourced or produced products.
 

Why are we talking about food fraud?

Food fraud has been around for thousands of years, with the first known cases dating back to the Roman Empire. In some countries, laws and regulations prohibiting these unsavoury practices have been around for more than 80 years. So why are we only hearing about it now?

“When I first started in my career, nobody knew what traceability was or what it meant,” says Charlebois. “People assumed that they got what they paid for. Today, we have the technology and the desire to trace and track products that we didn't have thousands of years ago. The technological evolution has allowed us to get a better sense of what is happening in the supply chain.”

Consumers are another driving force behind traceability. Now more than ever, consumers are demanding transparency and accountability — and they're broadcasting their demands to the world.

“Consumers, empowered by social media, are responsible for forcing the supply chain to become more transparent. When you talk about food fraud, you have to look at transparency in general, which is probably why we're talking more about food fraud today than ever before,” he says.
 

How many people are affected by food fraud?

With high-profile food scandals hitting mainstream news and social media, the world is becoming more and more aware of the practice of food fraud — but just how widespread is the problem?

“Around 40–50 percent of Canadians know or suspect that they have been a victim of food fraud. The reality is that 100 percent (or very nearly 100 percent) of people have been a victim of food fraud at least once, whether they realize it or not,” says Charlebois.

“With so much of this happening — and so many ways to do it — at different levels and steps in the supply chain, it is almost impossible for consumers to avoid it. But as we talk more and more about it, Canadians are waking up to the realization that the “too-good-to-be-true” bargain they got was exactly that — too good to be true.”
 

What is the CFIA doing about food fraud?

By all accounts, the Canadian Food Inspection Agency (CFIA) appears to be taking the issue of food fraud seriously; they even have a bureau that accepts and follows up on complaints and concerns.

“I've been quite impressed with the CFIA's awakening to the problem of food fraud,” says Charlebois. “They're getting more organized. They are actively seeking out experts to help them to look at food fraud from a different angle, and they recognize that food fraud is a food safety issue.”

According to the CFIA Chronicle, the agency fights food fraud by:

  • conducting inspections at different levels of the food trade
  • analyzing food samples (e.g. olive oil, honey, spices)
  • investing in proactive surveillance of food products
  • verifying that food labels and marketing materials comply with regulations
  • conducting environmental scans to identify high-risk areas
  • providing resources to consumers and the food industry (e.g. industry / consumer labelling tools)


“There's still a lot of work ahead,” adds Charlebois, “but I feel like we're moving in the right direction. We [The National Scientific Committee of the Canadian Food Inspection Agency] will be meeting in Ottawa in the fall to look at what can be done to protect whistleblowers.”

Why do whistleblowers need protection?

“Let's say you're an independent meat packer in Southern Ontario that makes veal sausages,” explains Charlebois. “You see that your competitor is selling the same sausages at half the price. You know how much it costs to produce those sausages, so you know that there's probably no veal in those sausages — or there is but it's being adulterated with cheaper substitutes. You want OMAFRA [Ontario Ministry of Agriculture, Food and Rural Affairs] to look into it, but if you report your competitor, they're just going to turn around and report you.”

“It's a no-win situation for the industry,” he continues. “It's important to find a solution because there are a lot of people out there who see things but can't report them without fear of retaliation, and that's information the CFIA needs to combat food fraud.”

Is blockchain the answer to food safety woes?

There's a lot of talk these days about blockchain being the solution to all food safety and traceability difficulties. Industry giants like Walmart are betting on it, which promises to have a significant impact on the food industry as a whole.

What is blockchain?

Blockchain is a distributed database made up of recordings, or 'blocks'. Each block contains a timestamp and a link to the previous block, which forms a chain. Everyone in the network gets a copy of the entire database and blocks cannot be removed or altered, making it impossible to tamper with or manipulate the chain with fake documents or transactions. Bitcoin was created based on this concept.

We asked our expert: Will blockchain solve food safety and traceability issues once and for all?

“A lot of people are jumping on the blockchain bandwagon,” explains Charlebois. “I understand why. The concept has merit and, in theory, there's a huge amount of potential there. However, when you apply that concept to the real world, it's a different ball game.

“It really depends on who leads the agenda. Blockchain technologies are creating a lot of tension in the industry right now. It's all about transparency and accountability, so, of course, it's making a lot of people uncomfortable — and not just the people who have something to hide.

“You have to look at power dynamics; with blockchain, you're basically telling [vendors and suppliers] that they either blockchain or they're out because the fundamental requirement for blockchain to work is that everyone is in it. Everyone would have to agree on this one system and I just don't think it's going to happen unless they're forced into it.”

“There are different versions of blockchain technologies,” he adds. “Some are heavier than others. Generally speaking, the idea has merit but it's just about finding the right balance.”
 

What is the responsibility of the consumer?

We've all been there. We're scanning the aisles of the grocery store for olive oil, honey, burgers, what-have-you. We take the cheapest version of what we're looking for, and why not? Why would we pay more for what is, essentially, the same product?

It's only natural — but it may also be contributing to a problem that affects everyone and endangers some of the most vulnerable people in society.

“We're hardwired to be bargain hunters,” says Charlebois. “To put that aside for a while is very difficult to do and it really depends on who you are. If you don't have food allergies and you don't really care about the quality of a particular product — let's say olive oil, you're just going to use it for cooking so the quality doesn't really matter to you — you're not going to think twice about buying the bargain product and that's really your business."

“However,” he adds, “by supporting the scam artists, you are contributing to the problem. Not voluntarily, but you're not asking questions and it makes it harder for honest companies to survive, which in turn makes it more difficult for consumers to find and buy responsible products.”

It is not the responsibility of the consumer to buy only the most expensive products in the grocery aisle — but it's important to ask questions. Remember that you have the power to influence the market with your words and your wallet. If you think that something is too-good-to-be-true, you can report it to the CFIA.