Financial Resource Center


Foodies Beware: The Rising Tide of Food Fraud

by Danielle Dresden / August 9th, 2010

Once, the principle of caveat emptor, or "buyer beware," ruled the marketplace, but the frequency of food fraud today could prompt a new watchword: Foodies beware. That extra-virgin olive oil, Hawaiian coffee, sheep's-milk cheese, and organic produce could well be generic quality or less, all dressed up with top-shelf packaging, placement, and—of course—pricing. Take these examples from the seafood industry, where things can get fishy indeed:
  • A Florida businessman pleaded guilty in 2007 to marketing more than one million pounds of Vietnamese catfish as grouper;
  • A Virginian was convicted in 2009 of selling 10 million pounds of Vietnamese catfish as red snapper, flounder, and grouper;
  • In 2010, an Alabama grand jury indicted three executives on charges of calling foreign and farm-raised shrimp "wild, American shrimp" and labeling as "fresh" fish that had been frozen, thawed, and washed in bleach;
  • More than half of the "wild salmon" sampled in a Consumer Reports study was actually farm-raised.
But sticking close to shore is no guarantee that consumers won't get soaked. In Connecticut, officials found samples of "extra-virgin olive oil" that were 90% soybean oil. No wonder the North American Olive Oil Association and the National Honey Packers & Dealers Association, both of Neptune, N.J., have petitioned the Food and Drug Administration (FDA) to set standards for olive oil and honey, so businesses could sue companies trying to pass off inferior merchandise.
More than half of the "wild salmon" sampled actually was farm-raised.
Food fraudsters have peddled ersatz cheeses, spices, wine, and other items. What did you have for lunch today? Are you sure?

Inside the world of food fraud

According to Dr. John Spink, associate director of the Anti-Counterfeiting and Product Protection Program (A-CAPPP) at Michigan State University in East Lansing, the reasons for food fraud are the potential for profit, unmet consumer demand, difficulty in detecting fraud, lack of laws against it, and limited enforcement. But now, a globalized economy and widely available technology are fueling its growth. Spink says a wide range of criminals commit food fraud, from the sole proprietor doctoring maple syrup to large-scale, factory-style operations run by organized crime. There are three basic types of harm from food fraud, Spink says, and they're not mutually exclusive.
  1. Direct—It's toxic and, if you eat it, you'll get ill right away.
  2. Indirect—The absence of a benefit, like a low dose of vitamin C. Indirect harm also can result if a troublesome substance builds up in the consumer's system.
  3. Technical—For example, when the country of origin is mislabeled. Many of the goods that food-loving consumers pay top dollar for have what Spink calls "credence attributes." Since consumers might not actually taste the difference between organic and conventional produce, or cold-pressed extra-virgin olive oil and an oil with a less fancy pedigree, they choose to believe they're enjoying these characteristics.
    What did you have for lunch? Are you sure?
For the most part, Spink says, food fraudsters are out to make money, not to cause physical harm, although that does happen. Basic food fraud methods include adulterating food, diluting products, switching labels, concealing the country of origin, and more. New variations of food fraud appear every day.

Tasting what you pay for

When food fraud gets downright dangerous, Spink says there are pretty effective systems in place to deal with it, similar to the response a salmonella outbreak would provoke. Dealing with economically motivated food fraud, which poses little direct health risk, takes a backseat in these days of scarce resources. It's also complicated, because tracking down and intercepting food fraud involves multiple disciplines and players. Spink brings 12 years of industry experience and a background in food safety to his work, along with a Ph.D. in packaging, and there are many additional specialties involved with stopping these multiflavored crimes. The response to food fraud involves experts in international trade, marketing, medicine, food science, pharmacology, retailing, consumer behavior, engineering, forensic science, and, of course, the criminal justice system. Food fraud can be identified through DNA testing and isotope ratio analysis, which can tell a food's national origin or if a fish is farm-raised or wild. This might sound awfully high-tech, but the technology and techniques are widely available.
Local isn't always better—the key is relationships.
In fact, high-school students in New York, working with scientists from Rockefeller University and the American Museum of Natural History, were able to discover substantial food fraud through random DNA tests. Producers and industry representatives like the Grocery Manufacturers Association, Washington, D.C., also are eager to stop food fraud, according to Spink. "What happens is, people lose trust in the brand," Spink says, and manufacturers do not want that.

Prevention and protection

To take a bite out of food fraud, Spink advocates stepping back and looking at the opportunities for fraud. "I'm suggesting that we shift from an ounce of cure to an ounce of prevention, and maybe we'll get an ounce of real extra-virgin olive oil," he says. Spink and his colleagues are studying previous examples of fraud, examining who did it and how, to find ways to intercept the food fraudsters. On a personal level, Spink recommends that consumers who'd like to avoid an identity crisis with their grocery lists patronize merchants with a vested interest in keeping them as repeat customers. Buying local isn't always better, Spink says—the key is relationships. "And if the price seems too good to be true, it probably is," he adds. "There's a difference between inexpensive and cheap." Consumers also can take a stand against food fraud by notifying their local FDA Consumer Complaint Coordinator and their county's public health department when they run into problems. "It's really our first line of defense," Spink says.
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