Managing food fraud
By James Pomeroy
In Canada the food manufacturing supply chain is becoming more and more complex. Higher costs and competition have pressured companies to find less expensive suppliers with the hopes of increasing their profitability. But as food manufacturers extend their supply chain globally and to more diverse suppliers, their exposure to potential food fraud increases substantially.
It’s estimated that food fraud costs the global food industry US$30 billion to US$40 billion a year. Food manufacturers in particular are at risk from fraudulent activities related to the quality of the products they source. Examples of fraudulent activities include:
If exposed, some fraudulent activities may simply erode customer trust in the quality of a product. But other activities can cause serious food safety issues, such as transmission of foodborne illness, or consumers having allergic reactions to unlisted ingredients.
For a food manufacturer, the consequences of food fraud, regardless of where it occurs in their supply chain, can be catastrophic. And with the prevalence of social media today, a company’s reputation can dissolve in minutes. Companies can also face harsh regulatory and legal penalties if found to be at fault or negligent.
So what can food manufacturers do to lessen exposure to food fraud? As a starting point, companies need to think more proactively about food quality and safety. To do this, food manufacturers should:
Incidences of food fraud may be on the rise, but food manufacturers which understand and manage food fraud risks will be well positioned to guarantee the quality and safety of their products. The trust of their customers, retailers and end consumers depends on it.
James Pomeroy is a director in PwC Canada’s Forensic Services group. He is based in Halifax, Nova Scotia. Contact him at [email protected]
This article appeared in the print issue:June 2016 edition, Ask the Expert section