Businesses urged to protect themselves against fraud

The food and drink industry is being urged to better protect itself against fraud in order to safeguard its businesses and consumers.

The warning comes from the Chartered Institute of Environmental Health (CIEH) as the membership body launches a new report which helps food businesses adopt established counter fraud good practice.

The good practice guidance was launched on 2 November and was developed by CIEH Food in collaboration with the University of Portsmouth’s Centre for Counter Fraud Studies, the Food Standards Agency’s National Food Crime Unit, Food Standards Scotland’s Food Crime and Incidents Unit and the Intellectual Property Office.

Co-author of the report, CIEH’s Eoghan Daly, says that despite extensive work being undertaken by food and drink businesses, there is no reliable information about the nature and extent of fraud affecting the sector.

“This is a serious problem as fraud not only has the potential to impact on an individual business’ profits and reputation, but it also reflects on the food industry as a whole and more importantly risks consumers’ trust and health,” he says.

“Food businesses need to quickly change their approach and adopt good practice in counter fraud as a key element of day to day business, before profits are hit and they lose customers.”

The guide explains that fraud is an issue for every business in every sector as it leads to financial costs, undermines consumer confidence and potentially impacts on consumers’ health and wellbeing.

In the food and drink industry, fraud can take many forms, such as the inclusion of contaminated substances in products, misleading claims being made in terms of quality or quantity or fictitious companies created to receive goods on credit, which then disappear without paying bills.

The guide says that despite extensive work undertaken by food and drink businesses to address fraud, there is no evidence that they are measuring the financial costs of fraud to their organisations. Without this information the report warns the industry will find it difficult to determine whether fraud is increasing or decreasing and whether or not their actions are effective.

To better protect themselves, CIEH is urging the industry to adopt proactive and comprehensive counter fraud strategies based on reliable evidence of the nature and scale of all fraud risks facing the organisation.

This approach would mean the industry would have to think wider than just focusing on known fraud issues related to products or ingredients.

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