9. Food fraud – reshaping the narrative

Food fraud, an uncomfortable & unfortunate part of agrifood systems

Food fraud comprises a variety of intentionally deceptive modes of conduct carried out with the purpose of cheating the system for an economic advantage.²⁸

Food fraud has been a concern since historic times.²⁹ Fraudsters use creativity and resources to place goods that are not what they seem on the market. They operate in a manner that does not draw attention to their activities with the aim of avoiding detection. In doing so, they deceive the system as a whole and undermine control mechanisms. By intentionally violating the explicit and implicit claims made on foods, they destabilize the relationship we all have with food, thus negatively affecting our confidence in foods and our future expectations.

Recent scandals have brought food fraud to the forefront of public discourse and the topic is of concern to consumers, the business sector and policy makers alike. In addition, food fraud remains a constant threat to the interactions and relationships within agrifood systems and affects the outcome of agrifood system interactions, one of which is food safety. The economic burden (Bindt, 2016) of food fraud is two-fold: i) economic damage and ii) unfairness between market actors.

Despite technological advancements in communication, analytics and value-chain traceability, there exist no easy solutions for this complex problem.

Overall, the current narrative is one of ever-increasing levels of food fraud incidences and of agrifood systems undermined by criminal elements accompanied by calls for urgent reaction without much consideration of what might be done and how. The narrative further fails to separate the impact of the crime itself from the impact of the crime on our emotional reactions to it (Levi, 2008).

Using foresight thinking to adjust the narrative

The thinking shared here has built on a foresight approach and aims to move the conversation about food fraud beyond the current narrative that seems to be circling around a limited number of themes. We will start by expanding the picture to consider a variety of system elements that are central to analysing the problem of food fraud and subsequently recombine these diverse strands of thinking with the aim of contributing to a discourse supporting a realistic assessment of the issue.

We start from the basic premise that there will never be an agrifood system without attempts at food fraud. However, we feel that with better overall understanding of the problem and how to maintain a judicious level of preparedness, we will contribute to minimizing the risk it poses and maintaining trust in our food (FAO, 2021).

In the following chapters we start by discussing whether the widely shared narrative of ever increasing instances of food fraud due to complex supply-chains is substantiated and will then move on to looking at those principles our food control systems rely on to create trust. We further continue by looking the role legislation has in increasing trust and addressing food fraud. Finally, we return to the notion of trust in social interactions and have a look at the role of the consumer within the food systems context.

The arguments for increased incidences are not based on solid evidence

Arguments supportive of an increase in food fraud are built on one or a combination of the following: recent scandals, an increase in recorded numbers (European Commission b, n.d.), an increase in academic publications, an increase in analytical results, and the increasing complexity of global supply chains.

These strands of argument feed into our fear of loss of control and make for great stories; however, a more careful look at the numbers might be pointing towards a different conclusion.

First, neither does the data cited as a proof of increasing instances of food fraud depart from a common baseline, nor is the methodology applied in determining the economic burden of food fraud harmonized (Bindt, 2016). In relation to data, one would also need to add that the hidden nature of the crime makes it near impossible to capture data reliably (Reilly, 2018).

Second, the argument of food fraud increasing as a result of complex food chains and globalization would deserve a closer analysis. Fraud in relation to foods was severely punished as far back as Babylonian times (Yale Law School, 2021), and publications demonstrating the level of adulteration of foods using chemical analytical methods in the early 19th century (Shears, 2010) illustrate that this crime of opportunity has been accompanying business activities regardless of the level of globalization and supply chain complexity.

As an alternative to these arguments, we propose to view the increase in requests, e.g. those submitted to the recently³⁰ established European Union Administrative Assistance and Cooperative System for Food Fraud for cooperation concerning suspected cases of fraud in the agrifood chain (European Union, 2020), as a consequence of raised awareness and willingness to contribute to a system put in place to address food fraud rather than a proof of increase in numbers.

We further propose to consider the increase in published analytical data identifying food fraud as an indication of the redirection of analytical resources within an agrifood system towards this necessary body of work and therefore as a contribution to more transparency and identification of cases that have so far gone unremarked.

Our food controls are built around the notion of trustworthiness of the agrifood system actors

Over the past century, the continued advancement of analytical techniques, our knowledge about food safety hazards, the shifting of the public agenda to the relationship between diet and health, and reactions to very prominent food safety scares resulted in a focus on the protection of consumers from food safety risks and less from fraud. This is mirrored in the fact that public health and facilitation of trade are the desired policy outcomes of food control systems (FAO and WHO, 2019).

Food safety, a central outcome of a functioning food control system, results from practices and controls involving all actors of the system with a major responsibility for following good practices born by the business sector. Over the years and based on experience, oversight has moved away from distrust and punishment towards an approach of learning and improvement in that producers and processors are expected and encouraged to adopt practices as appropriate towards the common goal of safe food. Oversight activities are carried out based on the notion that most actors want to and are doing their best to play by the rules. This food control system approach creates an environment of predictability which in turn supports trade, public health and builds consumer trust.

While this successful model builds upon the common notion that all stakeholders want to play according to a set of agreed-upon rules, practices and shared responsibility, food fraud does the opposite: it simultaneously benefits from the established trust mechanisms while undermining them thereby collapsing the multifaceted system of shared responsibility down to the actor(s) committing the fraud. As a result of this, the safety and quality of our foods relies on decisions and actions made by the fraudsters, which in turn can enhance food safety risks even if food fraud is committed with the goal of economic gain only.

This situation arguably puts a strain on food control systems because fraudsters see it as an opportunity to benefit from the efforts conducted by others to build trust: fraudsters disregard the ethical principles that have made the system trustworthy. Despite this, we would argue not to lose trust in the system, but to continue to work to maintain it and ensure that it is resilient to such attacks.

Regulation is a central part of trust-building in agrifood systems

Governments are in the unenviable position of having to develop policies and legislation to face this risk to agrifood systems that is hard to measure and predict.

The good news is that countries, regions and the international community are responding to the challenge food fraud presents. This provides an opportunity to learn from approaches and experiences adopted by others. In this section, we will present five regulatory strategies, from which countries can draw from to address food fraud and increase trust in their food systems. These strategies are based on i) food safety and quality frameworks, ii) consumer protection legislation, iii) contract law, iv) criminal law framework, and v) public-private collaboration (Roberts, Viinikainen & Bullon, forthcoming).

This grouping is simply intended to provide an orientation for developing national strategies that have common threads; however, there is considerable overlap and interdependence between each strategy. Additionally, these five categories are not comprehensive, and countries may have other approaches applicable to food fraud. Implicit in this section is the recommendation that national governments cannot fully address food fraud by just enacting a single law or a single strategy. Food-systems thinking about multiple strategies and coordinated effort amongst government agencies and with the private sector will be required for governments to successfully address food fraud and increase trust in agrifood systems.

Regardless of the overall strategy chosen, countries may find it useful to define “food fraud” in their legal frameworks, potentially relying on the defining elements of intentionality, deception and undue advantage. While a legal definition for food fraud is not strictly necessary to combat food fraud – essentially all actions that would be classified as “food fraud” are already prohibited in most if not all national legal frameworks – an agreed definition may still carry significant benefits in clarifying the regulators’ intent and be conducive to galvanizing action and support for the chosen regulatory strategies.

Food safety and quality is the “traditional” home of legislation countering food fraud, especially, but not limited, when the fraud poses a health risk. Many countries regulate food fraud within the framework of food safety and quality legislation, including rules on standard-setting, labelling and quality control. These can contribute to preventing food fraud, and also to establish legal grounds for surveillance, control, enforcement and even prosecution. The main limitation under this approach is that it may be less effective in cases where food fraud does not pose a direct health risk, as the system is built to capture certain, mostly known, issues endangering food safety, which may not be equally applicable to catch what the fraudsters are doing.

Consumer protection legislation offers a number of options for governments to protect consumers from food fraud. The crux of the legal protection in this subject area is that consumers should have the right no to be deceived by products and services which do not meet their expectations, to receive accurate and sufficient information regarding the product or service they want to purchase, and to seek redress against fraud and other unfair trade practices. Relying on consumer protection legislation, consumers may try to remedy food fraud directly by suing the offending food operators for fraudulent practices. Limitations of this approach comes from the capabilities and knowledge of consumers in relying the tools at their disposal, and the knowledge and capacity of consumer protection agencies to recognize and react to food fraud.

Contract law offers another strategy. Food supply chains are normally composed of vertical and horizontal chains of contracts connecting various core value-chain actors from producers to consumers, as well as contractual relations among operators of support services (e.g. purchase of inputs, financial agreements) (FAO, 2020). It is often within the context of these supply chain contracts, that the fraudulent behaviour occurs: one contractual party has no intention to follow the contract, but rather intentionally provides a product that does not match with its description in the contract and tries to mislead their counterparty as to this fact. As such, food fraud would most often be a violation of the underlying contract, bringing the topic within the scope of domestic contract law and allowing for contract law enforcement. As with consumer protection legislation, the real possibility to protect one’s rights under such enforcement may be the limiting factor.

Criminal and administrative codes can also define food fraud infringements and sanctions that complement the regulatory framework. The inclusion of food fraud into criminal codes reflects the uniqueness of this problem and its potential harmful effects. While criminal law does provide a valid avenue for the prosecution of food fraud, which is often a form of fraud criminalized in national criminal codes, care should be taken not to expand the use of criminal enforcement to other forms of infractions related to food safety and quality standards. It is because food fraud occurs at the nexus of criminal and non-compliant business behaviour that conceptualising it as a crime – where certain requirements of severity and intentionality are established as required by national legislation – is important for effective control.

Private sector regulatory strategies for addressing fraud in global food value chains, but also at domestic level, have emerged. There remains ample room for strategic use of private regulatory initiatives to control food fraud, especially with regards to transnational contracts. Self-regulation and co-regulation strategies, and private-public coordination opportunities for controlling food fraud in national and international food value chains, including the development of best or good practices by food companies, are especially ripe for exploration and consideration.

With all these options, and more, regulating food fraud to increase trust and choosing and implementing the optimal legal strategy requires thoughtful analysis, process orientation, and skilful implementation. It also requires consideration of the interrelationships between food fraud and public health, economic factors, fair commercial practices and consumer interests. The chosen regulatory approach to food fraud would also depend on the type of legal system that exists in a particular country (such as civil or common law), the existing legal and institutional frameworks and available resources. Above all, successful strategies to combat food fraud depend on strategic cooperation at all levels of governance along the food supply chains.

Employee inspects bottles of olive oil.
©FAO/Alessia Pierdomenico

Beyond the technical: considering the notion of trust in social interactions

Even though food fraud undermines trust, we need to remind ourselves that trust is a result of highly differentiated socioeconomic systems (Bachmann, 2001). Our globalized supply chains exist and function precisely because of trust; we cope with uncertainty through trust. In fact, in socioeconomic systems where there is little trust, interactions are limited to levels of control that are not conducive to growth because everything must be within eyesight. Societies are constantly producing trust through institutional and other mechanisms (Zucker, 1986) and our economy is a result of enduring patterns of social practices. In layman terms, one could say that it is made up of a fuzzy logic of shared beliefs rather than calculation.

Within this socioeconomic context, consumers are considered the weakest actor in an agrifood system when food fraud is concerned. Their role is the one of the ultimate trustors of the system who consumes the foods coming out of a value chain. In the context of an agrifood system where consumers can choose which foods to buy, they carry a share of responsibility by being able to put their money where their trust is.

In the case of most frauds, consumers cannot identify whether a food has for example been adulterated or whether the label accurately represents what is in the packaging. Therefore, their trust in what they buy relies heavily on the overall regulatory framework from which their foods derive and the commitment by the producing/processing sector to abide by standards.

From every technical progress, societal change, and regulatory achievement comes an increased demand for agrifood systems to deliver at the next level of expectations. Foods, in addition to nutritional and health demands, are carriers of societal global values relating to the environment, production practices, working conditions and so on.

Further to this, increased knowledge by agrifood system actors appears to also create a demand for more control over food attributes, which in turn places demands on the food sector to meet these demands of value attributes.

This increase in attributes of course requires additional controls for guaranteeing that foods meet these criteria and labels are not selling empty promises. However, these additional attributes provide additional surfaces for food fraud opportunities.

Instead of viewing this as a never-ending game of enabling fraud, we need to remain on the path of building resilient agrifood systems and argue against the demand for more control and more data with a statement provided by the social sciences which links back to the previous “fuzzy logic” description: Potential trustors need good reasons instead of precise data for their decisions.

What is the way forward?

It is a sobering thought to accept that we will not eliminate fraud from our agrifood systems, and that fraudsters are free riders whose business model thrives optimally where trust systems exist.

One might even argue that adverse situations that put strain on systems ensure that the systems stay alert and are thus better prepared for adverse events. Recognizing that this thought is theory only, we emphasized that the final call must be left to those bearing the responsibility of minimizing the economic damage, potential health consequences, and overall erosion of trust that fraud leaves in its wake.

A suggested way forward would be to avoid hasty reactions to every new food fraud scandal that hits the news, and instead to analyse how national and regional approaches can be developed using an appropriate combination of the regulatory strategies, including those introduced in this brief.

©Shutterstock/Microgen

We also caution against relying exclusively on data and data-based techniques as a solution for solving food fraud. Data on its own does not provide more clarity and is not a solution for the fact that fraud is linked to behaviour patterns inherent to human behaviour. We would rather recommend looking beyond data as a solution and considering social variables as an equally valid element of a discourse on food fraud.

In the restructuring of a food control system to better address the fraud, the tendency has been to include additional layers of administrative burdens on agrifood system actors that only result in slowing down the successful mechanisms in place that support trade and ensure public health.

As already alluded to, heightened awareness and vigilance and continued contributions to building resilient agrifood systems are our best chance at ensuring that the damage of food fraud can be managed