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How has COVID-19 impacted food fraud?

The coronavirus pandemic has been a turbulent time for global supply chains. As food networks become more vulnerable to fraud and crime, there may be a need to approach food assurance with new eyes.

Over the past decades, the food industry has built increasingly complex networks of food supply chains that, under normal conditions, are able to function without much complaint.

However, these supply chains have nearly buckled under the strain of a worldwide emergency, and the risk of food fraud as well as the financial incentive of food fraud have increased during this time.

It was this topic of food-related crime and the future of food assurance that was discussed in the last instalment of a recent Covid-19 webinar series organised by Fi Global Insights.

During this discussion, a panel of industry experts laid out the new threats to supply chains, and discussed how the industry can build better ways to combat criminal activity in the coming years.

Higher uncertainty, increased risks

Thinking back on the start of nationwide lockdowns in March 2020, panellist Jackie Healing said that one of her biggest challenges was helping hotel and restaurant businesses to close down and divert large quantities of food stock elsewhere.

Healing, who is the Director of Consulting and Technical Services at NSF International, mentioned that even early on there were signs of unusual behaviour when it came to moving excess food:

“A great many organisations handled [surplus stock] extremely professionally, putting the right allergen coding etc. onto the product, diverting it and donating it to charity. But there was quite a bit of food that sort of didn’t quite stack up in terms of the balance sheet, and will have gone off into the market—hopefully legitimately, potentially not quite as legitimately as we might have liked, and been potentially substituted somewhere else in the [supply] chain.”

Another panellist, David Psomiadis—Laboratory Head and Business Development Manager at Imprint Analytics GmbH—explained how the uncertainty of the ongoing situation has opened up new avenues for food fraudsters:

“The pandemic has created extraordinary turbulence in supply chains and triggered severe disequilibrium in supply and demand. Disruptions in food supply chains caused by the pandemic have provided new food fraud opportunities for criminals.”

These disruptions, according to Psomiadis, included reduced testing and oversight as well as unusual surplus of certain food ingredients, which led to increased risks of food fraud across the supply chain.

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He pointed out how recent scandals of horsemeat shipments and tainted alcohol have highlighted the existing gaps in the supply chain that are being exacerbated by regional pandemic measures.

Building mutual strength and resilience

Cut off from their usual suppliers and manufacturers, some businesses have had to look for alternative sources without the usual checks and auditing measures in place—leaving these businesses vulnerable to risks such as ingredient substitutions or dilutions.

With this issue in mind, a key takeaway from the webinar discussion was that collaboration and mutual support was the best way for businesses to maintain the security of their food supply.

Healing emphasised that businesses should be looking to “collaborate as much as you can” to mitigate the newly increased risk of food fraud, and she added:

“I’d strongly advise that you build and maintain your networks. And I suppose, if I were giving one piece of advice here to suppliers and manufacturers: this would be time to look after your supply base. This is the time to have strong relationships with your suppliers. This is not the time to be tendering out and looking for the cheapest product on the market because that’s almost certainly going to be a high-risk strategy for you going forward.”

Rethinking the system

Andy Kerridge, Deputy Chair of Food Safety Special Interest Group at the Institute of Food Science and Technology, sees this time of upheaval as an opportunity for a complete rethink of the established system for food audits and certification. As part of his presentation, he mentioned:

“The door has opened on technology and remote monitoring of some sort. We can therefore—somewhat grudgingly it seems—accept remote audit as part of the new way of doing things. But that’s not all, we can use this as an opportunity to ask: what do we want to achieve with assurance and how do we want to do it?”

For Kerridge, this overhaul would need to address the pain points of the current system: audits that are too frequent, time-consuming, and inflexible—with too much emphasis on passing grades and ticking boxes.

The panellists agreed that change was necessary, and they suggested that food businesses could move to adopt real-time monitoring of supply chains via blockchain ledgers and dashboards, where food provenance cannot be easily falsified and unusual activity can be readily identified. Kerridge added:

“I think there’s a huge amount of learnings that the food industry can take from other industries. It’s a late adopter of technology, and I think it shouldn’t be too proud to look outside its own industry as to what is the best way to deal with auditing and assurance.”

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