One in 10 experienced ‘high’ losses due to food fraud – survey

By Joseph James Whitworth

- Last updated on GMT

Picture: iStock. Importance put on certification schemes and third party testing and inspection services increased
Picture: iStock. Importance put on certification schemes and third party testing and inspection services increased

Related tags Food fraud Traceability Food

One in 10 experienced high financial losses due to food fraud in 2016, according to a survey.

A total of 10% said they had experienced high losses because of food fraud but it did not quantify what was meant by ‘high’.

The survey found 44% had experienced no losses in the previous twelve months and 10% had high losses due to a lack of supply chain controls.

The International Federation of Inspection Companies (IFIA) survey asked producers, manufacturers and retailers 32 questions relating to food fraud and traceability in supply chains.

Members of IFIA’s Food Committee including ALS, Bureau Veritas, Intertek, SGS, Baltic Control, Control Union, TUV SUD, RINA Services and Underwriters Laboratories are behind the survey.

The 2016 edition received 215 responses, down from 225 in 2015, with the majority from Europe (65%) but also North and Latin America, India, Asia-Pacific and China.

Regulations: Understanding and implementing divide

It found 76% indicated obligations within their country were fully understood but only 60% said they were being totally implemented.

Two-thirds of respondents in China, India, Latin and North America reported significantly higher levels of poor implementation.

However, 76% felt that, if fully implemented and understood, regulations in their country were sufficient.

Certification schemes are increasingly becoming an important factor for businesses when choosing suppliers, according to the results.

In 2015, only 48% said GFSI certification was a ‘very important’ factor when choosing suppliers but this increased to 60% in 2016.

For the use of third-party food testing and inspection services, 92% felt it was ‘important’ or ‘very important’ in 2016 compared to 79% in 2015.

Confidence levels in traceability system

More than four in five (81%) said traceability within food supply chains was ‘very important’.

Reasons for this included consumer expectations, work of NGOs and the media and acknowledgement that poor traceability left the business open to financial risk.

The survey showed that, while product traceability systems were often in place within businesses, respondents did not necessarily have confidence in them.

It found such systems have been implemented in businesses in and outside the European Union (89% and 80% respectively), with most including raw materials.

Despite this only 56% claimed to have full confidence in their traceability systems.

IFIA’s Food Committee said it shows while businesses are aware of the need for full traceability within supply chains, there is still a ‘long way to go’ before all ingredients can be traced back to origin and while regulations exist to combat food fraud and improve traceability they are not being fully implemented.

SGS targets growth in US market

Meanwhile, SGS has acquired Vanguard Sciences Inc for an undisclosed amount.

Vanguard Sciences is a provider of food safety testing services in product testing, R&D and food safety consultation, using an information technology platform.

The company’s core capabilities include microbiological, chemical and physical testing.

Vanguard Sciences is privately owned. It has 95 employees and accredited operations in North Sioux City and Oklahoma City. The firm generated 2017 revenues in excess of $11m.

Frankie Ng, CEO of SGS, said the deal provides immediate growth opportunities in the US food safety testing market.

“It expands on our existing testing capabilities in our new Brookings facility and further positions SGS as a global brand leader in food testing and related services.”

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