Food industry bites back on counterfeiting

A group representing the US food sector has released a new set of guidelines to help prevent counterfeits reaching consumers.

The document points out that while food retailers typically consider that counterfeiting of foods is a problem for the manufacturer, the public tends to place responsibility on both parties.

It was prepared by brand protection specialist Authentix and network specialist Inmar on behalf of the Food Marketing Institute (FMI)/Grocery Manufacturers Association (GMA) and sets out a series of best practices "to create a safer supply chain for consumers and to help protect manufacturers' and retailers' brands."

The best practices provide guidance for manufacturers and retailers on how to minimise the financial and reputational damage associated with counterfeiting of genuine branded products.

Also included are recommendations for a response protocol when counterfeit incidents occur and a benchmarking tool for assessing anti-counterfeit practices that manufacturers and retailers can use to develop effective brand protection programmes.

"We must be vigilant about safeguarding our supply chain from counterfeiters and step up our efforts to stop organised retail theft," commented Mark Baum, FMI's senior vice president of industry relations and chief collaboration officer.

The report notes that globalisation of the food industry is driving parallel import activity in many emerging markets, which makes it harder for manufacturers to lose control of the chain of custody for the products.

Counterfeiters are finding strong footholds in countries with "limited legal infrastructure", it adds.

"Counterfeit food and non-food consumer packaged goods (CPG) products are a nearly $1trn problem for manufacturers, their retail customers and consumers," said GMA executive vice president Jim Flannery.

"When inauthentic products wind up in the hands of consumers, they lose confidence in the stores and brands they trust."

Encouragingly, a majority (65 per cent) of manufacturers polled in the course of preparing the report indicated they had proactive systems in place to guard against counterfeiting. Another 23 per cent said they had reactive systems, while 12 per cent said they had no measures in place at all.

Among retailers, 70 per cent rated themselves as average or better than average against their peers at implementing supply chain integrity measures and protecting retail brand assets, but notably none had metrics to monitor counterfeit, diverted or unauthorised branded product.

The technologies employed by food manufacturers included barcodes, radiofrequency identification (RFID) and unique IDs, which used by 59 per cent of companies surveyed. All told, 44 per cent saying that overt packaging protection and verification was "somewhat effective" in tackling counterfeiting.

The recommendations in the report include developing a counterfeit risk-assessment tool, setting up a dedicated group with expertise in law enforcement, supply chain, packaging technology and legal, and building anti-counterfeit and brand protection into the product design process.