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Food Fraud IN THE GLOBAL SUPPLY CHAIN

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									                 IN THE
                                    GLOBAL SUPPLY CHAIN
       The best way to protect consumers—and your brand—is to apply a comprehensive set of
         deterrence strategies to prevent adulteration before product enters the supply chain.
                    By Jim Morehouse, Constanze Freienstein and Lola Cardoso




T
          he Grocery Manufacturers Association (GMA) and its Science          deceives the consumer as to the nature of the product (wherein a
          and Education Foundation (SEF) partnered with A.T. Kearney          cheaper alternative is substituted), for example, farmed salmon sold
          to execute a study on consumer product fraud in the food, bev-      as wild salmon.
          erage and consumer product industry.                                   Melamine was perhaps the proverbial straw that broke the camel’s
             This study was requested by the GMA following a series           back and acted as the trigger point for all industry stakeholders. From
of incidents where substitute food ingredients in China and elsewhere         melamine, the industry recognized that one economic adulteration inci-
were deliberately introduced into food products, the most famous be-          dent could have global market consequences, with broad and deep im-
ing the melamine episode in 2007. Since food fraud can take place at          plications for company brands, industry performance, peoples’ lives and
any stage along the global value chain, this is an issue that is of partic-   countries’ reputations. With a $10 billion price tag, 290,000 consumers af-
ular importance to supply chain executives, distributors and retailers.       fected around the world, more than 50,000 hospitalizations and six deaths
   For the purposes of this discussion, food fraud is defined as the           in China, the melamine contamination created a new reality.
deliberate placement of food on the market, with the intention of de-
ceiving the consumer for financial gain. The Food Standards Agen-              Understand Product Portfolio Vulnerabilities
cy in the United Kingdom considers two main types: 1) the sale of                The first step to incorporating defensive measures relating to food
food that is unfit and potentially harmful, such as recycling animal           fraud into an existing quality and safety program is to understand the vul-
by-products back into the food chain, and 2) the deliberate mis-cat-          nerabilities in the product portfolio. This requires creating a data reposi-
egorization of food. While not necessarily unsafe, the latter fraud           tory to gather more and better information and intelligence and using


                                                                                          www.foodlogistics.com •      F                MARCH 2010     31
models to forecast potential risks. The following offers more details.                 Determine where testing occurs: Ingredients should be tested as
   Manufacturers and suppliers must create a perpetual repository of in-            close to the original source as possible, since ingredient adulterants are
formation. A repository of information consolidates all relevant historical         easier to detect before an ingredient has been diluted or combined with
information about internal fraudulent incidents and external industry in-           other ingredients. Testing ingredients prior to receipt can also prevent
sights. The repository can harbor information on internal adulteration/             contamination within a company’s own supply chain.
fraud incidents—including specific details such as ingredient, adulterant,              Establ
								
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