Researchers explore economics of food fraud incidents

A single shipment of fraudulent food can result in tens of thousands of dollars in illegal profit, according to a new study.

Researchers at Michigan State University and lawfirm DeVries & Associates examined various incidents - including horsemeat in beef product, the sale of Salmonella-contaminated peanuts and the addition of melamine to wheat gluten - and used them to develop an overview of the economic impact of food fraud.

Using a hypothetical scenario - using a few pennies worth of melamine as an adulterant in place of wheat gluten in a protein bar - they calculate a potential profit of more than $60,000 from 50,000-bar production run.

For the company affected by the fraud, the activity can result in an expensive product recall and associated intangible cost of damaged reputation, say the authors, MSU's Douglas Moyer and John Spink and Jonathan DeVries.

The model reveals that food fraud can be an incredibly profitable crime, even when taking into account that these activities can be costly and technically complex, say the researchers.

"The economic gain of a food fraud can be calculated but the full economic impact is often incalculable," they conclude, adding that the huge number of opportunities to carry out fraud means that prevention rather than a tactical approach based on detection is the best approach.

The ability to actively detect fraud - in other words authenticate products - is the most technically challenging aspect of food fraud prevention, according to the paper.

They note that high-tech packaging components such as holograms can reduce the fraud opportunity, unless the fraudster has access to hologram technology. If the latter scenario is the case it greatly increases the ability to avoid detection.

"The overarching conclusion is that food fraud can be an incredibly profitable crime providing temptation to unscrupulous operators and presenting immense economic vulnerability for food manufactures and brand owners," write the authors.

The research is published in the journal Food Control (January 2017 edition).