Consumers want food firms to be more open on fraud

Consumers overwhelmingly expect more transparency from food and drink companies regarding food fraud, a new report reveals.

Research commissioned by accountancy firm Crowe Clark Whitehall, found that 80 per cent of consumers believe food and drinks businesses should monitor the type of fraud their companies are subject to, with 81 per cent saying the businesses should also report this.

Furthermore, 76 per cent of consumers agree that businesses should measure the amount of fraud they are subject to, with 81 per cent saying this information should be reported and shared.

The research, carried out by Ipsos Mori, surveyed more than 1,100 UK adults to establish consumer expectations with respect to food and drink businesses’ approach to counter fraud, notably in the wake of several high-profile fraud incidents, such as the 2013 horsemeat scandal.

“The findings presented suggest that, despite the progress made by the industry, consumers expect more transparency from the businesses they trust to provide their food,” the report said. 

According to the findings, the public expects that food and drink businesses act more promptly for frauds that could cause a health risk, with 42 per cent of consumers expecting businesses to share information with regulators as soon as they have a suspicion of fraud – that is, before they have any supporting evidence and long in advance of confirming whether a fraud has occurred.

Sixty-four percent of those surveyed expect food and drink businesses to share information with authorities when the incident may cause a health risk, and 49 per cent expect firms to share information with regulators when the incident may cause a financial loss to a customer or other member of the public. Over a third (35 per cent) expect firms to share information about fraud incidents that may cause a financial loss to the business affected, and also when the incident may cause a financial loss to another business.

Essentially, the report reveals that the majority of consumers expect food and drink businesses should share all available information with regulators about most fraud incidents – and in a timely manner.

The report noted that improved monitoring and prompt reporting by food and drink businesses would increase the amount of intelligence shared with authorities, which would increase the amount of intelligence the authorities have to share with industry, which would ultimately enhance consumer protection, and better meet consumer expectations.

“Current arrangements to share information between the food and drink industry and authorities about fraud are not in line with consumer expectations. In many cases the information shared by industry groups typically includes reference to the commodity affected, the type of fraud, and in some cases the supply chains affected. The shared information is ‘cleaned’ to strip out anything that could identify a specific company and/or particular food product,” the report said.

“Our research shows that consumers expect food and drink businesses to be much more transparent and, in the majority cases, share all available information with authorities. This means that businesses would share information about the product, organisations, and individuals involved.”

Meanwhile, survey respondents were also asked about whistleblowing in the case of company insiders committing fraud. More than three quarters of consumers (78 per cent) agree that food and drink businesses should raise awareness of whistleblowing hotlines provided by the Scottish Food Crime and Incidents Unit and the National Food Crime Unit. This includes, for example, promoting and advertising details of the hotlines to staff in the industry.

Similarly, the majority of consumers (72 per cent) agree food and drink businesses should support whistleblowing hotlines provided by both food crime units. This includes, for instance, providing funding or staff to run whistleblowing hotlines.

“Consumer perceptions of the food and drink industry suggest there is a divergence between current practice and what consumers expect food and drink businesses to do. Consumer expectations are reasonable and would, if adopted by the industry, contribute towards strengthening the fraud resilience of the UK food and drink industry,” the report said. “Aligning industry practice with consumer expectations will help to improve transparency of the food and drink industry with respect to fraud, and by doing so increase consumer trust.”