Food fraud can devastate consumers and the industry, resulting in brand trust and market share loss. It can also affect the health of the consumer and the supply chain.
One study found that 39% of consumers were likely to stop trusting a brand with fake products. Another study found that 44% of consumers were alleged to have bought phony food last year. These figures equate to more than $40 billion in losses for the industry each year.
Food fraud occurs when an ingredient does not match the label. It can happen by substitution, mislabelling, or adulteration. The result is a product that is lower in quality or contains allergens and other unwanted bacteria or substances. Some examples of fraud include using melamine in milk, which artificially increases the product’s protein content.
According to the Consumer Brands Association, food fraud costs the industry $10 to $15 billion annually. Fraud can also invalidate claims about organic products, halal meat, and vegetarian products.
Recent high-profile cases of food contamination include peanut butter in the U.S. and infant formula in China. Other instances of mislabelling, such as contaminated pet food, have received little attention.
Several international bodies exist to address food fraud. They include the EU Rapid Alert System for Food and Feed and the Food Authenticity Network. However, the economic impact of food fraud on consumers is still understudied. When you need advice from Food Safety Consultants, go to https://mqmconsulting.co.uk/
A recent consumer opinion survey about food fraud found that nearly one-fifth of participants aren’t sure what to do if they suspect it. This is likely due to a need for more awareness about the nature of the problem and a low level of concern about it when shopping. Nonetheless, more than half of consumers agree that the food industry is doing all it can to protect them from fraud.
A key parameter used to quantify the welfare effects of fraudulent activity is the number of credence attributes in the food, which measures the degree to which a consumer knows or believes that the food they are about to purchase is authentic. Many of these attributes are not visible to the consumer but are essential to the industry.
The results suggest that fraud is a weak link in the food supply chain. As a result, food fraud’s supply and demand effects are primarily dominated by the supply effect. While the consumer is unaware of the problem, a single case of fraudulent activity can affect the value of all product categories.
Increasing consumer awareness can help the industry do a better job of addressing the problem. More attention should be placed on the authenticity of foods and the integrity of the manufacturers and retailers.