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Supply Chain Complexity Can Result in Fraud, Study Finds

Last year's horse meat scandal in the UK illustrated the ease with which criminals could target the food industry and make huge profits as they did so.

Supply Chain Complexity Can Result in Fraud, Study Finds

An official interim report to review the integrity and assurance of food supply networks by Chris Elliott of Queen’s University in Northern Ireland, states that the emphasis on providing cheap food has led to complex supply chains which are ripe for fraudulent activity.

“I believe criminal networks have begun to see the potential for huge profits and low risks in this area,” he said. “A food supply system which is much more difficult for criminals to operate in is urgently required.”

Elliott singled out two areas where the meat industry, and this applies equally to the fish industry, is particularly vulnerable – the buying and selling of meat by traders and brokers, and the storing of frozen meat in cold-stores.

“Traders and brokers will buy and sell meat of any quality or quantity,” Elliott said in his interim report, which was published on December 13, 2013. “Most traders don’t have physical possession of the meat that they buy and sell. They trade from an office, even over a mobile phone, while the meat will more than likely be held in a cold-store.

“They may never own the meat, but merely arrange the deal.”

Traders and brokers are highly vulnerable links in the supply chain of meat, according to Elliott. “Information from a number of sources indicates that large amounts of meat of dubious origin and quality remain available for purchase through traders and brokers.”

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Keywords: Supply Chain Management, Logistics Management, Warehouse Management, Food Supply Chain, Supply Chain Safety, Supply Chain Risk

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