“Food adulteration” refers to bad practices ranging from dishonesty regarding the geographic origin of a product to the use of lethal poisons as “secret” ingredients. Up until the 19th century, few were even aware of the deceptions retailers and processors were getting away with. Some argue it took the 1820 publication of A Treatise on Adulterations of Food, and Culinary Poisons by German chemist Frederick Accum to expose the unsafe practices of many food retailers. And while Accum was one of the first to bring the issue to light, dishonest practices in the food industry—especially those that are economically motivated—have remained rampant.
In 2009, the United States (US) Food and Drug Administration (FDA) provided a working definition of “economically motivated adulteration” (EMA) at a public meeting:
“Fraudulent, intentional substitution or addition of a substance in a product for the purpose of increasing the apparent value of the product or reducing the cost of its production, i.e., for economic gain.”
One of the most challenging aspects of modern-day food fraud is gaining a detailed understanding of the issue. When fraudulent practices are economically motivated, they can be extremely well-disguised, making such practices challenging for inspectors to catch and nearly impossible for consumers to notice.
The Grocery Manufacturers Association (GMA) estimates that food fraud costs consumers up to $15 billion annually and that roughly 10 percent of all commercial food is affected —especially olive oil, honey, and milk.
Despite recent advances in detection technology, fraud continues to play a role in food markets. Adulteration can theoretically impact any edible item, but tends to occur in higher frequencies in olive oil, fish, fruit juices, honey, dairy products, meat, grain-based foods, alcoholic beverages, organic products, spices, tea, coffee, and several highly processed foods. The producers, manufacturers, or distributors who intentionally deceive consumers typically do so because committing fraud can be easy and cheap, while the potential gains from doing so can be massive.
While the problem is widespread, only a handful of countries have organizations actively challenging various forms of food fraud, with many of those countries only establishing institutions because of a prior incident. In an interview with Gro Intelligence, Dr. Doug Moyer, a researcher at the Food Fraud Initiative at Michigan State University, explained how food fraud policy is often driven by consumer outrage. And consumers are most likely to be outraged when adulteration has resulted in widespread, life-threatening or deadly illness.
In the US, several groups including the FDA, the US Pharmacopeial Convention (USP), and the National Center for Food Protection and Defense (NCFPD) maintain various databases and coordinate prevention and correction efforts. Dr. Moyer contends that because such data is historical, its usage is useful for awareness and education but has limited predictive value. A powerful and effective data analysis project would require more quantitative and dynamic data in order to gauge the current risk and scale of a particular food fraud incident.
While food adulteration can occur in a number of ways, most instances are examples of replacement, addition, or removal. Replacement refers to the partial or complete substitution of an ingredient. Many prominent fraud cases have involved various forms of replacement, such as the addition of melamine into milk in China in order to cheat protein-measuring tests. Replacement also covers geographic dishonesty, such as olive oil that is labeled as Italian, even though it actually consists of oils from other regions. Mislabeling food as “organic” or “natural” when such food has not met these criteria is also an example of replacement adulteration.
Addition occurs when a non-authentic ingredient is included in a food product in order to disguise the existence of an inferior product, such as dye being applied to spices—such as red dye in chilli powder—in order to mask poor quality.
Finally, removal can be described as the intentional exclusion of an ingredient without disclosure to the consumer. An example of removal is the filtering of honey for various pollens or residues in order to disguise the product’s biological and geographic origins.
Edible oils are relatively easy to distort, hence they comprise roughly 26.5 percent of all documented fraud cases in the USP Food Fraud Database.
Geographic deception is particularly rampant in oils. Italy, widely associated with producing premium olives, is one of the largest exporters of olive oil. The country is also, however, a major importer of the product, bringing in 59.5 million tonnes of olive oil or nearly 60 percent of all European imports and twice that of second-largest importer Spain. What many producers across Italy (as well as Spain) are doing is importing large quantities of olives and olive oils from across Southern Europe and North Africa and processing, refining, and labeling it as “Italian” (or “Spanish”), despite the products’ different origins. Surprisingly, this practice is actually legal, though the source of the underlying commodity is supposed to be specified on the label.
Consumers covet “extra virgin” varieties of olive oil, expecting products marketed as such to indeed have the necessary levels of oleic acidity—the sole trait that distinguishes oil as extra virgin—to earn that designation. And yet producers, refiners, and distributors have been shown to market their oils as “extra virgin,” even when the composition does not earn that right. Furthermore, many labels contain various phrases that seem related to the oil processing, such as “cold-pressed”. Yet such terminology can actually be irrelevant, as the distinction between cold and hard-presses is archaic, given that most oils are produced today using centrifuges.
Governments of some of the key olive producing countries have initiated efforts aimed at thwarting fraud, at least at the refinery level. In Italy, there is a section of the Italian Carabinieri, the specialist food piracy branch, that is highly trained by the national olive oil association to readily discern between the quality and origins of various oils. This branch of the Carabinieri participated in a sting operation in 2008 known as “Operation Golden Oil,” which led to the arrest of 23 individuals and seizure of 85 farms that were connected to fraudulent trade.
Additionally, there have been cases of cheaper oils including soybean or canola being mixed with and marketed as pure olive oil, a blatantly fraudulent practice. Some refiners go so far as to mix chemicals such as beta-carotene into these substitute oils to alter the taste and dyes to change the oil’s appearance, so that it might look more like authentic olive oil. Just last year several major producers, including Salov North America Corp.and Deolio USA were accused of mislabeling in separate class-action suits. The suits come on the back of a 2011 University of California study which suggested that a majority of imported olive oils sold in California failed to meet the generally accepted criteria for labels such as “virgin” or “extra virgin.” The study indicated that a whopping 69 percent of imported oils fell short of meeting the standards necessary to be classified as “virgin” or “extra virgin” compared to the California-produced oils, of which only 10 percent failed to meet their respective quality criteria.
It’s not yet clear how the California lawsuits will play out and if there will be an impact on broader US policy. Dr. Moyer notes that domestic olive oil producers have historically “struggled for regulators’ attention regarding fraudulent products and ‘hidden competitors’,” but reiterated that the incidents of fraud which sicken and kill consumers are the ones that become highly publicized, and as a result are the most effective in driving food fraud policy, legislation, and enforcement. In many markets, it remains challenging for consumers to take legal action against committers of food fraud because those culpable frequently command a considerable share of the market and wield significant influence. Furthermore, the mislabeling in these cases tends to have no significant impact on health or safety—consumers are being ripped off, not endangered—and may mean that regulators are slower to act.
Over the past few years, the honey industry has been shocked by widespread accusations of adulteration, with about seven percent of fraud cases in the USP Food Fraud Database involving honey. And while the practice of artificially manipulating honey is rampant, some of the fraudulent practices in markets like China are particularly alarming. The antibiotic chloramphenicol, which is prohibited for use in food in many countries, is frequently used to retroactively and proactively treat bees, and has as a result been detected in retail honey. Chloramphenicol can have adverse health effects on humans, particularly infants, and side effects even include potentially fatal illnesses such as acute lymphocytic leukemia and aplastic anemia.
US honey demand used to be entirely met by domestic supply. That was until foreign producers, chiefly China, began to flood the market with cheap product. Throughout the 1990s, American beekeepers claimed China was artificially and unfairly lowering prices by dumping honey into the US market. US trade officials first placed large import duties in May 2001 on Chinese honey in an effort to curb this dumping. On paper, Chinese honey exports to the US nearly came to a screeching halt, but a deeper dive into bilateral trade data suggests otherwise.
Chinese honey exports to the US began to decrease once these anti-dumping duties were enforced, while imports from other Asian countries like India, Malaysia, and Indonesia rose markedly. An investigation by US authorities soon unveiled an international conspiracy through which Chinese honey was being exported to neighboring countries and then re-labeled as Malaysian, Indonesian, or Indian and sent to the US. Brokers in Taiwan, South Korea, and Russia were also implicated.
A number of international companies were found to be involved in the illicit China-to-US honey shipments. One firm, ALW Food Group, based in Germany, fraudulently shipped $80 million worth of honey through a false labeling scheme. The company’s elaborate conspiracy involved shipping honey in black drums (because Chinese drums were typically green), altering the taste and disguising the origin of the honey through the addition of sugar, molasses, or fructose syrup; and keeping communications with brokers through telephone calls conducted in German. ALW depended on several brokers overseas to handle the on-the-ground shipments and cooperated with several local processors, one of which, Honey Holding, was known to willingly accept honey shipments that all others had rejected at a discounted price. Honey Holding, a Texas-based processor, then sold this widely-rejected honey to other food companies in the US. AWL was eventually raided by US authorities, and some employees were arrested with at least two of these employees pleading guilty to one count of fraud.
The concerns over Chinese honey have not been limited to the US—the European Union (EU) banned Chinese honey imports and increased inspection efforts in June 2010. The EU now requires advanced certification proving that the import is not of Chinese origin, as well as additional tests designed to verify the absence of chloramphenicol and lead. The EU has gone so far as to even ban imports from India (which it lifted by 2012), given the frequency with which Chinese honey was smuggled through India. Indeed, industry analysts believe that Chinese honey continues to be smuggled into India through third parties, as imports from India as well as Vietnam continue to surge at a pace that likely outstrips domestic production figures.
The ability for Chinese honey to be smuggled into the US over so many years and in such vast quantities highlights a common shortcoming in trade inspection—such inspections are typically driven by country of origin information, meaning that it becomes difficult when the country of origin is being obfuscated. Some independent bodies in the US, like the certification agency True Source Honey, are working to address the honey authenticity issue by independently auditing and certifying foreign honey suppliers. Meanwhile, the US industry remains hopeful that the FDA and other regulatory bodies will make their inspection efforts more robust and capable of more effectively blocking Chinese honey.
In many ways, the melamine incident of 2008 opened the floodgates for food safety and adulteration awareness and action. This instance of fraud occurred in China, and included contaminated products like milk, milk products, and even baby formula. As a result of the tainted products, nearly 300,000 infants fell ill, and unfortunately, several died.
According to the World Health Organization (WHO), melamine “is an organic base chemical most commonly found in the form of white crystals rich in nitrogen.” At first glance, it may seem odd that a nitrogen additive would be included in milk products. Yet the reasoning is that China historically faced significant adulteration of milk via dilution, through which water is added to raw milk to increase volume. Dilution reduces milk’s protein level and makes it fairly easy for regulators or quality assurers to identify cases of adulteration. The tests utilized by regulators measure nitrogen levels of the milk as a proxy for protein level checks—fraudsters, therefore, add melamine into milk to raise these nitrogen levels and make it seem as though the product has sufficient levels of protein.
Melamine crystals can react with naturally occurring body fluids and produce kidney stones, and can also block various channels within kidneys that are highly sensitive. As a result, kidney failure is a fairly common side effect of melamine ingestion and was the cause of six deaths in the 2008 incident.
While over 20 companies played a role in the scandal, the state-managed Sanlu Group soon emerged as the ringleader and initiator of much of the fraud. The company was blamed for the melamine addition, and although Sanlu Group received its first complaint in late 2007, it took until September of 2008 for the company to acknowledge the situation and issue a recall. Chinese authorities destroyed some 10,000 tonnes of formula seized during this period, but much of the damage had already been done. Sanlu Group later filed for bankruptcy, and foreign manufacturers quickly began to take advantage of the dire situation by ramping up marketing efforts in order to win over market share. In 2003, New Zealand was exporting just under 100,000 tonnes of concentrated or sweetened milk and cream to China; while that year, the US was exporting about 60,000 tonnes of whey and natural milk products to the country. By 2014, New Zealand’s exports exploded to over 700,000 tonnes, and the US’s whey and natural milk exports quadrupled to over 200,000 tonnes. And while the Chinese market has become flooded with foreign milk—data suggests at least half the Chinese infant formula market is represented by foreign brands—local production may be en route to recovery. Chinese dairy imports have slowed this year, demonstrating the country’s growing ability to win back local consumers, and the heightened regulatory environment that has helped enable that regaining of trust.
Dr. Moyer noted that China is an excellent example of a government that is moving quickly to address food fraud issues. While many foreign consumers view a market like China as a source economy for food fraud-stricken products, he contends that the domestic consumer markets of these countries bear the same risk. He points out that this dynamic creates an environment in which advances in policy and enforcement, and awareness and inspection have a much more effective outcome than simply stricter import bans from foreign consumer markets.
Though the root of economically motivated adulteration is monetary, the consequences of such fraud can prove to be not only harmful to consumers, but even fatal. Economically-driven fraud is typically challenging to discover or prove, and this has caused frustration for many countries, trade groups, and health organizations alike. While governments and trade organizations understandably place a great deal of attention on food safety, it is easy to forget how quickly a food fraud issue can become a food safety issue.
The olive oil, honey, and milk cases detailed in this analysis are just a handful of known adulteration cases that have occurred recently. There are undoubtedly more cases that the public has yet to learn of, and many more still that we will likely never discover. Governments must at the minimum take a best-efforts approach to increase archival data of known food fraud events, as the data behind food fraud and adulteration is currently extremely limited.
As with any market, the best way to create an equal playing field is by unveiling the hidden advantages that a few abuse in order to gain over the rest. By increasing the breadth and depth of data available on food fraud, stakeholders will begin to expose the severity and acuteness of this opaque issue.
Receive our research in your inbox
Thank you for subscribing to our newsletter!
What Information Do We Collect?
The information we gather enables us to personalize, improve and continue to operate the Services. We collect the following types of information from our users.
IP Address Information and Other Information Collected Automatically:
· We automatically receive and record information from your web browser when you interact with the Services, including your IP address and cookie information. This information is used for fighting spam/malware and also to facilitate collection of data concerning your interaction with the Services (e.g., what links you have clicked on).
· Generally, the Services automatically collect usage information, such as the number and frequency of visitors to the Site. We may use this data in aggregate form, that is, as a statistical measure, but not in a manner that would identify you personally. This type of aggregate data enables us and third parties authorized by us to figure out how often individuals use parts of the Services so that we can analyze and improve them.
Information Collected Using Cookies:
· Most browsers have an option for turning off the cookie feature, which will prevent your browser from accepting new cookies, as well as (depending on the sophistication of your browser software) allowing you to decide on acceptance of each new cookie in a variety of ways.
We collect statistical information about how users collectively use the Services (“Aggregate Information”). Some of this information may be derived from Personal Information. This statistical information is not Personal Information and cannot be tied back to you or your web browser.
How, and With Whom, Is My Information Shared?
IP Address Information:
Information You Elect to Share:
We share Aggregate Information with our partners, service providers and other persons with whom we conduct business. We share this type of statistical data so that our partners can understand how and how often people use our Services and their services or websites, which facilitates improving both their services and how our Services interface with them. In addition, these third parties may share with us non-private, aggregated or otherwise non Personal Information about you that they have independently developed or acquired.
Information Shared with Our Agents:
We employ and contract with people and other entities that perform certain tasks on our behalf and who are under our control (our “Agents”). We may need to share Personal Information with our Agents in order to provide products or services to you. Unless we tell you differently, our Agents do not have any right to use Personal Information or other information we share with them beyond what is necessary to assist us. You hereby consent to our sharing of Personal Information with our Agents.
Information Disclosed Pursuant to Business Transfers:
In some cases, we may choose to buy or sell assets. In these types of transactions, user information is typically one of the transferred business assets. Moreover, if we, or substantially all of our assets, were acquired, or if we go out of business or enter bankruptcy, user information would be one of the assets that is transferred or acquired by a third party. You acknowledge that such transfers may occur, and that any acquirer of us or our assets may continue to use your Personal Information as set forth in this policy.
Information Disclosed for Our Protection and the Protection of Others:
Information We Share With Your Consent:
Except as set forth above, you will be notified when your Personal Information may be shared with third parties, and will be able to prevent the sharing of this information.
Is Information About Me Secure?
We store all of our information, including your IP address information, using industry-standard techniques. We do not guarantee or warrant that such techniques will prevent unauthorized access to information about you that we store, Personal Information or otherwise.
What Information of Mine Can I Access?
You can access and delete cookies through your web browser settings.
California Privacy Rights: Under California Civil Code sections 1798.83-1798.84, California residents are entitled to ask us for a notice identifying the categories of personal customer information which we share with our affiliates and/or third parties for marketing purposes, and providing contact information for such affiliates and/or third parties. If you are a California resident and would like a copy of this notice, please submit a written request to the following address: 12 E 49th Street, 11th Floor, New York, NY 10017
What If I Have Questions or Concerns?
If you have any questions or concerns regarding privacy using the Services, please send us a detailed message to firstname.lastname@example.org. We will make every effort to resolve your concerns.
Effective Date: March 11, 2014
b. You shall not (directly or indirectly):i. take any action that imposes or may impose (as determined by us in our sole discretion) an unreasonable or disproportionately large load on our (or our third party providers’) infrastructure;ii. interfere or attempt to interfere with the proper working of the Services or any activities conducted on the Services;iii. bypass, circumvent or attempt to bypass or circumvent any measures we may use to prevent or restrict access to the Services (or other accounts, computer systems or networks connected to the Services);iv. use manual or automated software, devices, or other processes to “crawl” or “spider” any page of the Site;
v. harvest or scrape any Content from the Services;
vi. otherwise take any action in violation of our guidelines and policies;vii. decipher, decompile, disassemble, reverse engineer or otherwise attempt to derive any source code or underlying ideas or algorithms of any part of the Services (including without limitation any application), except to the limited extent applicable laws specifically prohibit such restriction;viii. modify, translate, or otherwise create derivative works of any part of the Services; orix. copy, rent, lease, distribute, or otherwise transfer any of the rights that you receive hereunder.c. We also reserve the right to access, read, preserve, and disclose any information as we reasonably believe is necessary to:i. satisfy any applicable law, regulation, legal process or governmental request;ii. enforce these Terms of Service, including investigation of potential violations hereof;
iii. detect, prevent, or otherwise address fraud, security or technical issues;
iv. respond to user support requests; or
v. protect the rights, property or safety of us, our users and the public.4. Third Party Services. The Services may permit you to link to other websites, services or resources on the Internet, and other websites, services or resources may contain links to the Services. When you access third party resources on the Internet, you do so at your own risk. These other resources are not under our control, and you acknowledge that we are not responsible or liable for the content, functions, accuracy, legality, appropriateness or any other aspect of such websites or resources. The inclusion of any such link does not imply our endorsement or any association between us and their operators. You further acknowledge and agree that we shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any such content, goods or services available on or through any such website or resource.5. Termination. We may terminate your access to all or any part of the Services at any time, with or without cause, with or without notice, effective immediately. All provisions of these Terms of Service which by their nature should survive termination shall survive termination, including, without limitation, ownership provisions, warranty disclaimers, indemnity and limitations of liability.6. Warranty Disclaimer.a. You release us from all liability for you having acquired or not acquired Content through the Services. We make no representations concerning any Content contained in or accessed through the Services, and we will not be responsible or liable for the accuracy, copyright compliance, or legality of material or Content contained in or accessed through the Services.b. THE SERVICES AND CONTENT ARE PROVIDED “AS IS”, “AS AVAILABLE” AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES IMPLIED BY ANY COURSE OF PERFORMANCE OR USAGE OF TRADE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED. WE, AND OUR DIRECTORS, EMPLOYEES, AGENTS, SUPPLIERS, PARTNERS AND CONTENT PROVIDERS DO NOT WARRANT THAT: (I) THE SERVICES WILL BE SECURE OR AVAILABLE AT ANY PARTICULAR TIME OR LOCATION; (II) ANY DEFECTS OR ERRORS WILL BE CORRECTED; (III) ANY CONTENT AVAILABLE AT OR THROUGH THE SERVICES IS FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS; OR (IV) THE RESULTS OF USING THE SERVICES WILL MEET YOUR REQUIREMENTS.7. Limitation of Liability. IN NO EVENT SHALL WE, NOR OUR DIRECTORS, EMPLOYEES, AGENTS, PARTNERS, SUPPLIERS OR CONTENT PROVIDERS, BE LIABLE UNDER CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE OR ANY OTHER LEGAL OR EQUITABLE THEORY WITH RESPECT TO THE SERVICES FOR ANY (I) LOST PROFITS, DATA LOSS, COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, COMPENSATORY OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER, SUBSTITUTE GOODS OR SERVICES (HOWEVER ARISING), (II) BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE (REGARDLESS OF THE SOURCE OF ORIGINATION), OR (III) DIRECT DAMAGES IN EXCESS OF $50.00.8. Governing Law and Jurisdiction. These Terms of Service shall be governed by and construed in accordance with the laws of the State of New York, including its conflicts of law rules, and the United States of America. You agree that any dispute arising from or relating to the subject matter of these Terms of Service shall be governed by the exclusive jurisdiction and venue of the state and Federal courts of New York County, New York.9. Miscellaneous.a. Modification. We reserve the right, in our sole discretion, to modify or replace any of these Terms of Service, or change, suspend, or discontinue the Services at any time. Your continued use of the Services following notification of any changes to these Terms of Service constitutes acceptance of those changes.b. Entire Agreement and Severability. These Terms of Service are the entire agreement between you and us with respect to the Services, including use of the Site, and supersede all prior or contemporaneous communications and proposals (whether oral, written or electronic) between you and us with respect to the Services. If any provision of these Terms of Service is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that these Terms of Service will otherwise remain in full force and effect and enforceable. The failure of either party to exercise in any respect any right provided for herein shall not be deemed a waiver of any further rights hereunderc. Force Majeure. We shall not be liable for any failure to perform our obligations hereunder where such failure results from any cause beyond our reasonable control, including, without limitation, mechanical, electronic or communications failure or degradation.d. Assignment. These Terms of Service are personal to you, and are not assignable, transferable or sublicensable by you except with our prior written consent. We may assign, transfer or delegate any of our rights and obligations hereunder without consent.e. Agency. No agency, partnership, joint venture, or employment relationship is created as a result of these Terms of Service and neither party has any authority of any kind to bind the other in any respect.f. Notices. Unless otherwise specified in these Term of Service, all notices under these Terms of Service will be in writing and will be deemed to have been duly given when received, if personally delivered or sent by certified or registered mail, return receipt requested; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; or the day after it is sent, if sent for next day delivery by recognized overnight delivery service. Electronic notices should be sent to email@example.com. No Waiver. Our failure to enforce any part of these Terms of Service shall not constitute a waiver of our right to later enforce that or any other part of these Terms of Service. Waiver of compliance in any particular instance does not mean that we will waive compliance in the future. In order for any waiver of compliance with these Terms of Service to be binding, we must provide you with written notice of such waiver through one of our authorized representatives.h. Headings. The section and paragraph headings in these Terms of Service are for convenience only and shall not affect their interpretation.Contact. You may contact us at the following address: 12 E 49th Street, 11th Floor, New York, NY 10017.