Considering the huge cost of food fraud in global supply chains, it might come as a shock to consumers to learn how weak are the current efforts to put a stop to it.
By some estimates, food fraud and mislabeling affect 1% of global trade, at a cost of $49 billion annually. Worldwide, some 600 million people fall ill to contaminated food each year, according to the Global Food Safety Initiative.
The problem is as old as food supply chains themselves, but in recent years, it’s been made worse by a shift in supply to unprotected markets, economic turmoil, and the rise of e-commerce, which allows sellers to shield their identity.
In many cases, it’s impossible to identify the ultimate source of food or the methods used to produce it, says Ram Ben Tzion, co-founder and chief executive officer of Publican, a digital vetting platform. And that opens the door to both fraud and quality issues.
The resulting public safety crisis “is beyond the ability of regulators and government to monitor,” Ben Tzion says.
Mislabeling and misclassifying are rampant among fraudsters who seek to bypass regulations, inspections, quality checks and the payment of appropriate duties. Manufacturers might also seek to disguise their true identity if the product comes from a country that uses slave or forced labor.
Many instances of mislabeling involve the use of banned pesticides, in an attempt to boost yields. Ecuador, a major producer of bananas, has seen extensive use of pesticides on international shipments, Ben Tzion says. Also of recent concern are raspberries contaminated with hepatis, resulting in a ban on shipments to the European Union.
A popular variant of modern-day food fraud is what the U.S. Food and Drug Administration refers to as economically motivated alteration, or EMA. It occurs “when someone intentionally leaves out, takes out or substitutes a valuable ingredient or part of a food.”
EMA also happens “when someone adds a substance to a food to make it appear better, or of greater value,” FDA says. Examples include diluting expensive olive oil with cheaper vegetable oil, mixing cheaper sweeteners into pure honey or maple syrup, bulking up expensive spices with non-spice plant material, swapping out expensive fish for less expensive species, and watering down juices sold as containing “100%” fruit juice.
The U.S., at least, doesn’t lack for laws and regulations for ensuring the quality and purity of food. They include the Food Safety Modernization Act, Federal Food, Drug and Cosmetic Act, and a host of labeling regulations. But in the absence of strong oversight of labeling and product origin, those measures can only do so much to protect consumers. According to the Centers for Disease Control and Prevention, an estimated 48 million people in the U.S. alone fall ill, 128,000 are hospitalized, and 3,000 die each year from foodborne diseases.
The key to smoking out food fraud is access to data, Ben Tzion says. Manufacturers must be held to strict reporting and quality standards on an ongoing basis. “Without a continuous mechanism to check [food quality], you end up eating something very bad.”
The trick, he adds, lies in being able to aggregate information coming from multiple sources, then pull the desired data on demand to assess the quality and provenance of each individual shipment by manufacturer.
Certain anomalies can set off alarms if sufficient information is available to trigger them in something approaching real time. Buyers can detect problems by running through combinations of suspect origin, manufacturer and the product itself. Suppliers can be checked against databases that are routinely updated by government action. The EU, for example, might issue a new warning on a specific product, which impacts the entire network and the data that accompanies it.
The practice is similar to that which identifies illegal recipients of high-tech exports, Ben Tzion says. “You have the ability to pull data from multiple disparate sources on demand, then check whether the picture is normal or abnormal.” The same routine can be applied to medicine, food or a wide range of commodities.
Modern-day technology provides the ability to access data in multiple forms, reaching beyond the U.S. and Europe to problematic countries such as Bangladesh, the Democratic Republic of the Congo and Ecuador. And artificial intelligence is in the early stages of being able to detect issues, based on sifting through millions of pieces of data.
When it comes to actual deployment by global food traders, however, these techniques and technologies remain in their infancy. Many supply chains still consist of “black holes” of information that frustrate the ability of regulators and businesses to safeguard the food supply chain. A lack of global standards among trading countries also serves as an inhibitor to total visibility and quality assurance. “That will take an agreement from all governments worldwide,” Ben Tzion says.
Still, he sees progress toward securing the food supply chain and attacking the scourge of food fraud. “What we have now is better visibility and an understanding of the problem, both in public opinion and along the supply chain. As technology becomes more widely used, we will start asking the question.
“The outlook for the future of food quality and safety is better than it was,” Ben Tzion says.
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