Eco-labeled Food Faces High Fraud Risk

by | Oct 3, 2017

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Organic and eco-labeled food products face high risk of food fraud because they command a higher price, and the growing market for sustainable and premium foods increases the risk, according to Ecovia Intelligence. Such fraud has economic, environmental and health implications; greater transparency in the supply chain can combat the problem, Ecovia suggests.

In May, 2017, a shipment of 36 million pounds of corn and soya beans into the US was falsely labeled as organic; by obtaining organic status, the shipment – which originated in Ukraine – increased in value by about $4 million on arrival in California.

Ecovia Intelligence says Asia faces the most risk from food fraud. “In the last decade, food scandals have involved mislabeled organic pork, rotten meat, and sewage oil,” Ecovia reports. “In 2008, the adulteration of dairy products and milk powder with the industrial chemical melamine led to six baby deaths and 300,000 sick.”

Asia faces high risk because of the growing demand for organic food combined with a lack of regulations and/or enforcement.


Cocoa and Sugar at Higher Risk

Confectionery containing fairtrade or organic cocoa and sugar carry one of the highest risks of adulteration and mislabeling in the food and drink industry, Ecovia Intelligence told Confectionary News. The supply chains for these items is particularly long and complex, making them a target for fraud.


Supply Chains Must Become Transparent

The more complex the supply chain, the greater the risks of food fraud, because ingredients pass through multiple intermediaries before reaching stores. But as consumers become increasingly interested in knowing the origins of their products, companies find it more important to build transparency into their supply chains.

In fact, traceability has become a major issue for companies like Tyson, which are being asked by consumers, investors and other stakeholders to address unsustainable and unethical practices along their supply chains.


Blockchain Technology Helps Combat Food Fraud

A group of leading companies across the global food supply chain have joined in a “blockchain” collaboration with IBM to combat these problems by improving traceability.

Blockchain, a digital list of records that enables proof of ownership and the transfer of ownership from one entity to another, allows ingredients to be tracked and recorded through extended supply chains.

IBM and a consortium companies including Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods, Unilever and Walmart are working to identify new areas where the global supply chain can benefit from blockchain and further strengthen consumer confidence in the global food system.

IBM says its blockchain technology can be used to improve traceability by providing trusted information on the origin and state of products. In the case of the global food supply chain, all participants -growers, suppliers, processors, distributors, retailers, regulators and consumers – can gain access to information regarding the origin and state of food for their transactions. This can enable food providers and other members of the ecosystem to use a blockchain network to trace a product to its source.


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