Food labelling, food fraud and you.

August 7, 2016

Australia’s new food labelling regulations will be a major step towards combatting the growing challenge of food fraud and help improve consumer confidence.

Consumers need to be able to trust the provenance of the food they buy - and so do producers, suppliers and retailers. Australia's food labelling changes are an important step towards giving all parties confidence in food supply.

These regulations can also be an important tool in the fight against food fraud. It's an old problem - England has food purity laws dating from the 13th century - but professional criminals have now moved into this lucrative global market. PwC estimates that organised crime costs the industry as much as USD$40 billion every year, while consumers are more demanding, and better-informed, than ever. These and other food safety related topics will be discussed at the upcoming HACCP conference in Australia.

Food fraud: not just a financial risk

Businesses can very quickly suffer significant financial losses from damage to their reputation. For example, social media and customer anger drove a rapid and severe backlash against a number of big brands globally as a result of the recent scandal over slave labour in the Asian prawn industry.

Food fraud has made many headlines in recent years, and producers and retailers alike have felt the financial impact. Examples include horse and other meats being substituted for beef in pre-packaged foods sold in Europe, adulteration of oregano in Australia, and global-scale substitution of lesser-quality fish species for cod and salmon.

The damage is not just economic. In England, a restaurant owner has been convicted of manslaughter and sentenced to six years in prison for the death of a customer. The owner prepared chicken masala using a cheaper peanut flour instead of almond flour and the customer - who was aware of his allergy to peanuts - died from an anaphylactic reaction. On a much larger scale, the adulteration of baby formula with melamine in China made more than 300,000 infants sick and resulted in six deaths.

As a result of such incidents, and of the growing awareness of the scale of food fraud globally, governments and regulators are adapting their frameworks. To this end, food labelling regulations are not just an important measure in their own right, they're also a step towards a more comprehensive approach to supply chain management.

New ways to look at the problem

One important technique for addressing some of the problems presented by complex global supply chains is horizon scanning. Horizon scanning takes findings uncovered by predictive analytics and projects them into the future as a way to anticipate and mitigate risk - and potentially, to improve an organisation's reputation, market position and competitiveness.

Predictive analytics tools track relevant changes to identify patterns that lead to particular results. These include local and global changes around politics and legislation, product supply and demand, climate variations, crop yields and failures, disease outbreaks, commodity prices, test results, social media traffic, news stories and more.

For example, it might find that, for a particular food, low crop yields and commodity price spikes associated with key ingredients, combined with particular agriculture policies, climate events and demographic changes, usually result in falling quality, increased demand and thus higher prices being paid for lesser quality goods.

Horizon scanning uses such analysis to look forward. Typically, it involves modellers taking half of a predictive analytics data set, further analysing it to identify patterns, and creating a predictive model. That model is then tested against the remaining half of the information to see if it produces accurate results against a known data set.

With good horizon scanning practices, a business can plan ahead, using past experience as an intelligent learning tool. Looking into the future in this way allows businesses to switch suppliers or find alternative products ahead of supply-related problems impacting the market. This means retailers can keep products on the shelves and maintain customer trust, and potentially improve their competitiveness and market position.

Accurate labels are just the beginning

In order to fully and accurately meet Australia's new food labelling requirements, work must be done and for most organisations, new systems and procedures put in place. According to Dawn Welham, Global Technical Director, SAI Global, a comprehensive approach would encompass the following:

  • Supply chain and site audits  

  • Second-party inspections for Quick Service Restaurants (QSR) and stores  

  • Horizon scanning:  

    - predictive analytics and risk identification 

    - trend identification

    - monitoring and reporting
     
  • Food safety - industry standard public courses  

  • In-house courses - bespoke or customised  

  • Incident management:   

    - food safety or experience complaints

    - escalation and management 

    - advisory services 

    - policy development 

    - desktop supplier approvals  
  • Product compliance management: 

    - product, ingredient and supplier mapping

    - authenticity and integrity verification 

    - claim verification and labelling 

With the above in mind, the practical steps most businesses can take in the short term include:

  • Gather information and audit your organisation's:

    - Skills

    - Training

    - Institutional knowledge
  • Perform a gap analysis to identify:

    - Consequences of non-compliance

    - Internal/external resources available to ensure compliance
  • Identify whether it's cost-effective to handle compliance internally

  • Identify whether using an independent contractor would improve operational integrity

  • Identify opportunities to use compliance to create competitive advantage

The question of implementation is paramount and with so many information sources to consider, from every territory around the world, it's unlikely that food producers will manage all these processes in-house.

Cost and security are also important factors as companies don't always know what to look for - food safety testing is well understood but food fraud testing isn't. 

Conclusion

Ultimately, the food industry must ensure consumer confidence. Australia's new labelling requirements should be seen as an opportunity for the industry to provide that confidence. Organisations that lead the way will find themselves with a competitive advantage over the laggards, making the task imperative for forward-looking, growth-oriented companies.

SAI Global has taken a leading role in protecting the world's population from food fraud. Contact us if you'd like to know more, or to speak with one of our experts.

 

Dawn Welham

About Dawn Welham

Dawn commenced work at SAI Global in 2015, in her role of Global Technical Director. She was recently awarded the CIEH 2016 Professional of the Year Award, in recognition of her outstanding work in improving business performance and people's health and well-being. View more information about Dawn.

Dawn will be a speaker at the 23rd Australian HACCP in Melbourne, 5-6 October, 2016. 

About HACCP

The Australian HACCP Conference has been the must-attend event for Australian food safety professionals for more than 20 years. Throughout its long history, the Australian HACCP conference has received extensive media coverage throughout Australia and has been labelled the leading food safety event in the country. The conference regularly attracts food safety professionals from across the retail, agriculture and food industry.

Visit the HACCP site for more information about the upcoming event.  

 

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