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Fighting Food Fraud to Protect Brand Australia

By Steve Lapidge

The global fake food trade rivals narcotics in scale. What can the Australian food industry do to safeguard its reputation for producing safe, high-quality food?

The counterfeiting of Australian food and wine products in key export markets is potentially costing Australia nearly $2 billion each year, economic modelling released in late 2017 by Food Innovation Australia Ltd has shown. Topping the list are dairy ($360 million p.a.), wine ($303 million p.a.) and red meat ($272 million p.a.) losses, with horticulture and seafood following closely behind.

Due to Australia’s global reputation as a supplier of high quality and safe food and wine in the international marketplace, Brand Australia is increasingly being hijacked by unscrupulous operators copying our products. Pricewaterhouse Coopers reported that global food fraud costs the food industry more than $50 billion each year, and is on the rise, with 10–20% of all food and wine products not what they claim to be. This puts the global fake food trade on par with narcotics.

Food fraud occurs when products are deliberately tampered with, substituted with another product, diluted or mislabelled. One high profile example was when milk and infant formula was adulterated with melamine, a white plastics precursor, in China in 2008, leading to six fatalities from kidney damage as well as illness in 300,000 babies.

More recently there has been major horse meat scandals in Europe, whereby horse meat was being deliberately mislabelled as beef. Why? Because horse meat is much cheaper than beef, so food companies can increase their profits.

Pricewaterhouse Coopers also identified the main targets of food fraud as staples like olive oil, milk, honey, orange juice, tea and coffee. Recent estimates put the cost of food fraud in the United Kingdom at £11 billion, or £424 per household.

For Australian food and wine exporters, luxury brands such as Blackmore Wagyu beef and Penfolds wines have been heavily targeted be counterfeiters in Asia. In November 2017, Chinese police found 14,000 bottles of fake Penfolds wine after a complaint to online retailer Alibaba by Treasury Wine Estates, the owner of the Penfolds brand.

Australian food imports as well as local products are not immune to food fraud. CHOICE, the Australian consumer advocacy group, reported in 2016 that only five of 12 oregano products on the supermarket shelf contained 100% oregano. One brand contained less than 10%.

In the same year a study into seafood fraud, conducted by US-based conservation group Oceana, found that one in five pieces of seafood tested worldwide were mislabelled. Importantly, many of the substituted species posed a health risk for consumers.

Although we have a long way to go, the tide is now starting to turn on food fraud. Consumers are wanting proof that what they are buying is the genuine article.

One Australian food company, Beston Global Food Company, is already capitalising on this trend. It has developed a closed supply chain into Asia for its premium Australian diary products, which are fully traceable back to the source and come with anti-counterfeiting packaging.

Other companies are now offering alternative means of product verification based on isotopic ratios, key trace elements, DNA profiles, mass spectrometry, portable spectroscopy and unique associations of metabolomics linked to the bioclimate, water and underlying geology and soils used to produce the foods. Such approaches test the food or wine product itself, rather than the packaging it is in, as this can be reused. For instance, The Weekly Times reported last year that the average bottle of champagne in China is refilled and sold seven times.

One such approach currently in operation is Physi-Trace™ within the Australian pork industry. Based on trace element analysis, Physi-Trace™ can be used effectively to validate the country, state and farm of origin of fresh pork, as well as whether it is of Australian origin or not in regards to ham and bacon, much of which is imported.

With the rise of online food shopping, particularly in Asia, the ultimate aim must be to get the next generation of food and wine authentication tools into the hands of consumers. This will be a key aim of the proposed Fight Food Waste & Fraud CRC. Ultimately we cannot stop counterfeiting, however we can empower consumers to ensure that they are receiving the genuine article. Furthermore, ensuring that Australian food and wine exporters have rigid product authentication techniques in place will help protect Brand Australia should a food safety incident occur.

Dr Steve Lapidge is Bid Leader of the Fight Food Waste & Fraud CRC.